Impact of US Tariffs on Trade with China

by

Ifitwasup2me

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I read an article today from the BBC news ” Trump delays tariffs as the rest of the world plays hardball” and noted the effect on trade from China.

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In this report, it records Chinese exports to US has fallen by 9.7%. In 2024, the Chinese exported $525Bn worth of goods, so a reduction of 9.7% reduced the US import by $51Bn to $474Bn

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However with the current tariff is now 30%, up by 11% from 2024. This means that an additional cost of of $52Bn. is added to the cost of imports.

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Conclusion is that the US economy is getting less goods for the same price!!, i.e less product for more cost, which will only make the economy poorer. It is also likely to increase costs further, due to the most basic of economic theories, supply and demand.

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Furthermore, China has increased its exports to the rest of the world by 6% (ref BBC) meaning an additional $205 Bn of exports. So the US tariffs is no more than an inconvenience.

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So what would I do,

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Well, we are where we are, and given the National Debt, I agree the need to increase taxes. As tariffs are just another tax, it is one of the many ways to increase tax (I consider the tariffs is only another form of sales tax, it is just applied at a different part of the supply chain) And to some extent, it will encourage some re-shoring,

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I think a more structured implementation would have been more beneficial so as not to alienate your closest of friends. Trying to beat someone up never works in the long run.

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I would have targeted those industries I want to protect in my own country or those industries i want to encourage to re-shore. I would not target specific countries.

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In conjunction with this, I would also give tax breaks to those industries / companies that do re-shore or set up in my country.

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