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< Back to question What are the views on the US - China trade war? Show more Show less

Donald Trump's protectionist economic policies led to the introduction of tariffs on $550 billion worth of imports from China. President Xi Jinping responded with tariffs of his own, affecting some $185 billion worth of US-made products. As the two global economic behemoths enter a trade war, what are the implications for both economies and the rest of the world?

The trade war is bad for the United States Show more Show less

The United States should pick its fights better; the trade war with China will harm United States consumers and businesses by causing exporters to lose business and U.S. consumers to pay higher prices.
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The tariffs harm the United States

The tariffs do have a large impact on China, but they harm the United States. China’s tariffs hurt American exporters as the higher prices force consumers to go elsewhere. U.S. tariffs on imports cause higher prices for U.S. consumers.
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Proponents


The Argument

Even if the United States wins the trade war, it will be far worse off than it was before. The U.S. has a trade deficit with China, but the imports it is putting sanctions on are not ones over which it has a lot of influence. It only imports a small quantity of steel from China, and this represents a small percentage of Chinese exports both to the United States and globally. Firstly, this means that it will not have a large impact on the Chinese economy. Secondly, many of the tariffs hurt American allies to a greater extent, including Canada and South Korea. The retaliatory tariffs hurt American exports as the higher prices force consumers to go elsewhere. If the U.S. permanently losses its Chinese consumers, then many industries will be substantially damaged. A strong example of this is U.S. soybean exports which account for $3.1 billion of U.S. exports to China.[1]This industry cannot afford to lose its exports to China. Also, the tariffs will have a large impact on American jobs. Whilst a few American jobs in steel production will be protected, there are many more jobs in industries that use steel as part of their products that will be harmed by a rise in prices. This means more Americans are likely to be harmed than helped by these tariffs, even before retaliations are put into place. The tariffs which protect American manufacturing are more politically damaging for two reasons. First, the tariffs raise prices on imported goods for a large number of Americans, especially for the poorest consumers because the greatest percentage of their income is spent on consumption. Second, manufacturing is not moving back to the United States (the intended outcome); instead, manufacturing is moving from China to other countries such as Taiwan, Vietnam, South Korea, Japan, and the European Union.[2] This damage to Americans means that any politicians that continue to support the trade war are more vulnerable at a future election and are more likely to back down. Continuing in the trade war will have significant effects on the lives of Americans. It causes the loss of large numbers of jobs in significant industries and an increase in prices of consumer goods making life more difficult for American households. This results in an economic slowdown, leading to wider damaging effects across the country.

Counter arguments

While tariffs do harm the United States, they harm China more. China has suffered declining exports and industrial output growth.[3] Chinese consumers are also seeing rising prices on imports, particularly agricultural goods. [4] If the U.S. can withstand the harm and outlast China, it will reap the rewards when it wins the trade war and forces China to change its unfair trading practices.

Premises

[P1] The tariffs will not have a large impact on the Chinese economy. [P2] China's retaliatory tariffs hurt American exporters as the higher prices force consumers to go elsewhere. [P3] Tariffs on imports cause higher prices for U.S. consumers. [P4] Manufacturing is going to other countries, not back to the United States. [P5] The tariffs harm the United States.

Rejecting the premises

[Rejecting P1] The tariffs have already hurt the Chinese economy. [Rejecting P2] Tariffs do harm the United States, but they harm China more. The U.S. will reap the rewards when it wins the trade war and forces China to change its unfair trading practices.

References

  1. https://www.cnbc.com/2019/08/09/chinas-surging-food-prices-wont-weaken-its-hand-in-the-trade-war.html
  2. https://knowledge.wharton.upenn.edu/article/us-china-trade-deal-looking-beyond-truce/
  3. https://www.npr.org/2019/10/10/768569711/has-the-trade-war-taken-a-bite-out-of-china-s-economy-yes-but-its-complicated
  4. https://www.nytimes.com/2019/06/04/business/china-food-prices-inflation.html

This page was last edited on Friday, 19 Jun 2020 at 01:24 UTC

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