Trump has privately discussed with advisers the possibility of imposing a flat 60% tariff on all imports from China, according to three people who asked not to be identified to discuss private conversations. .
All of these options would result in significant disruption to the U.S. and global economy, far exceeding the effects of the trade wars of President Trump's first term, economists from both parties say. Trump has frequently praised Xi Jinping as president of the country and for signing a trade deal with China in 2020, but now he has repeatedly criticized the Chinese government during his campaign and has taken a tougher stance than President Biden. is promised.
President Trump's determination to escalate his trade war with China reflects the new economic stakes of the 2024 election, as the former president looks increasingly confident of winning the Republican nomination. President Trump has floated some fanciful new ideas for his second term, such as building “free cities” around the country equipped with flying cars, but his main focus is on This is a strengthening of the policies he promoted during his first term, such as strict immigration enforcement. Lower corporate taxes and devastating new tariffs on U.S. trading partners.
“The 2018-2019 trade war caused tremendous damage, but this far exceeds that by comparison,” said Erica York, senior economist at the Tax Foundation, a right-wing think tank that opposes tariffs. It's even difficult.” “This threatens to transform and disrupt global trade to a degree not seen in centuries.”
A Trump campaign spokesperson did not respond to a request for comment.
Biden has largely kept in place the tariffs imposed on China by Trump as president in 2018, and he has also imposed new restrictions on China's economy, including new limits on semiconductors and other manufacturing equipment.
But Trump promises to go further. At the White House and on the campaign trail, President Trump has argued that import tariffs would strengthen domestic industries while raising money for the federal government, which both parties argue would lead to higher costs for U.S. consumers and producers. economists have been ignored or dismissed. President Trump has repeatedly boasted that tariffs in his first term brought billions of dollars into the U.S. treasury, but he added about $8 trillion to the national debt in his first term through spending increases and tax cuts. . He also approved a relief package of about $30 billion to compensate farmers hurt by China's retaliatory tariffs.
Despite the destabilizing effects of tariffs on the global and U.S. economies, President Trump has promised to dramatically expand their use in his second term. He has suggested enacting “universal standard tariffs” on virtually all imports, roughly $3 trillion worth of items, which would mean that the amount of items subject to tariffs would increase in the first term. This will be an increase of more than nine times compared to the previous year. He also talked about pushing legislation that would allow the United States to automatically impose “reciprocal” tariffs on American exports equal to those of all countries, which would almost certainly lead to a surge in trade hostilities. Dew.
But President Trump's plan for China may be the most dramatic and destructive. Both publicly and privately, President Trump has touted the China tariffs as a major accomplishment of his first term and vowed to redouble his approach if re-elected, despite opposition from many Republicans.
As of November, China was the third largest trading partner of the United States after Mexico and Canada, accounting for 11.7% of total U.S. foreign trade.
Before winning the New Hampshire primary, Trump said, “I fought communist China like no other administration in history, and I fought against communist China like no other administration in history, and I fought against communist China, thousands of thousands of dollars, at a time when no other president literally got a dime from China.'' billions of dollars directly into the Treasury,” he said in New Hampshire. Contest. “Nobody even tried. We received hundreds of billions of dollars in funding.”
Most economists argue that these costs were paid primarily by U.S. consumers and businesses, not by the Chinese government or Communist Party.
American consumers and businesses will likely bear the brunt of a new China trade war. In November, Oxford Economics said in a report commissioned by the U.S.-China Business Council that the end of permanent normal trade relations with China would cost the U.S. economy $1.6 trillion and eliminate more than 700,000 jobs. announced the results of a study that found that it leads to the loss of However, several prominent Republicans also support the measure.
In 2022, the most recent year for which data is available, the United States imported approximately $550 billion of products from China. The current average tariff rate on these products was approximately 12%. President Trump imposed 25% tariffs on about $150 billion worth of goods and an additional 7.5% tariff on another $100 billion worth of goods, but the rest of the Chinese imports from about 2. imposed a 3% tariff. The Tax Foundation's York said the average tax rate is high.
Adam Posen, president of the Peterson Institute for International Economics, a think tank in Washington, called President Trump's trade proposals “insane” and said this kind of crackdown on imports from China would cost the U.S. billions in potential customers. He claimed that it would cause damage to the company.
“If the Trump administration imposes higher tariffs on imports from China, U.S. companies will lose most of their market share both in China and in many third-party countries,” Posen said.
Mr. Trump and his defenders often argue that tariffs primarily serve as a strategic tool to force foreign adversaries to adjust their deceptive trade practices. Policymakers in both parties now argue that China's economic policies, including artificially devaluing its currency to support exports, are undermining U.S. manufacturing, and Mr. Trump wants Beijing to reverse course. Tariffs are sometimes discussed as a way to enforce
“The president believes that the tariffs he imposed in his first term provided significant revenue to the American people,” said Newt Gingrich, a former Republican speaker of the House of Representatives and an outside adviser to the president. “My personal conversations with President Trump have shown me that he deeply believes that tariffs will allow us to negotiate from a position of strength because we still have the largest market in the world. is.”
A study by the Tax Foundation found that most of the Trump tariffs, continued by the Biden administration, reduced long-term wages by 0.14% and reduced employment by 166,000 jobs. The Coalition for a Prosperous America, a group that supports tariffs, has found that tariffs help boost domestic investment with minimal impact on prices.
