Free Trade, or Trade War?
If anyone has been paying attention to news in the business world recently they’ve most likely come across some headlines reading along the lines of “Trade War With China”, “Tariffs Imposed on Chinese Goods”, or something of the like. Recently, in an effort to crack down on what the Trump Administration views to be “unfair” trade practices being committed by China on the United States. To enforce this crackdown, the administration has decided that the route that they would like to go about in would include posing trade tariffs, or a tax on imported goods, on multiple products that China sells here in the United States. China, in retaliation against what it sees to be a violation of its potential for economic growth has decided recently also to place its own tariffs on goods that companies in the United States ship and sell in the Chinese markets. These tariffs have included everything from washing machines to aluminum. More recently, China has even taken the step to threaten to impose sanctions on American-produced and grown “production crops”, a direct threat to the economy of some of the states, mostly located in the Southern United States, that voted heavily for Trump in the 2016 election. With no current stable end it sight, it remains to be seen whether or not threat of a trade war comes to fruition.
To make matters even the more frightening, China’s commerce ministry stated last week Thursday that, “China will not enter into any negotiations while under threat from the United States” and that “China will follow through to the end and fight resolutely” (NPR). Without any substantial potential for talks, aside from the fact that the current administration might find future implementations of sanctions to be taken as incredibly personal - as they would be directly attacking the guarded constituency of states making up the Republican party - it remains to be seen whether any amelioration of the current crisis can come to reach reality.
In my personal view, in addition to what many proponents of free trade would say, would be that the existence and newfound appearance of these tariffs and their imposition will end up very badly for not only both the economies and consumers of the United States and the People’s Republic of China, but also the world economy as a whole. Consumers in both nations will be forced to spend more money on these goods due to there existing a hefty tax now on them, and will ultimately result in much political and economic woes in the both countries’ constituencies. Higher prices are something that no one wants, and continuing with free trade - without the existence of any tariffs or other barriers - is the right way to go and internationally the world economy will thank us for it.
Press, DAKE KANGAssociated. “In China, Soybean Industry Shrugs off Risks of Tariffs.”, 14 Apr. 2018, www.pressherald.com/2018/04/13/in-china-soybean-industry-shrugs-off-risks-of-tariffs/.
Gonzales, Richard. “Trump Threatens China With Additional $100 Billion Of Tariffs; China Ready To Fight.” , NPR, 6 Apr. 2018, www.npr.org/sections/thetwo-way/2018/04/05/600014441/trump-suggests-more-tariffs-may-be-coming.
Mcdonald, Joe. “Chinese Exporters Scramble to Cope with Trump Tariff Hike.” , ABC News Network, 16 Apr. 2018, abcnews.go.com/Technology/wireStory/chinese-exporters-scramble-cope-trump-tariff-hike-54493955.