When Donald Trump was on the election trail, he blathered on and on about our trade with China, and how the U.S. was getting the short end of the stick. He claimed that he’d crack down on them on day one, if he won the presidency. Well, he’s been in office well over a year now, and he’s just now getting around to keeping that promise.
Last week it was announced that Trump is preparing to impose $60 billion in annual tariffs against Chinese products, that he says will punish China for intellectual property theft. Trump’s senior aides went to him with a $30 billion tariff proposal but Trump told them to double that number. According to the Washington Post;
‘The package could be applied to more than 100 products, which Trump argues were developed by using trade secrets the Chinese stole from U.S. companies or forced them to hand over in exchange for access to its massive market.’
It’s certain that China won’t sit idly by and do nothing if the tariffs go into effect. This could be the beginning of a trade rift between two of the world’s largest economies. Not everyone agrees with Trump’s new tariff proposal. Phil Levy a former trade advisor to president George W. Bush had this to say;
‘This looks much more like a president who is excessively eager to apply tariffs than a well-calculated move to defend American interests. There are real concerns about Chinese behavior on intellectual property, for example, but there are much more effective ways to address them.’
While most U.S. businesses agree that something has to be done about China’s trade practices, they don’t think a trade war is the way to go. The U.S-China Business Council believes that Trump’s tariffs will do more harm than good. They would rather see solutions to the issues, not sanctions against one of their biggest trade partners. This would require negotiations, and everyone knows that Trump really isn’t good negotiating anything.
Trump’s newest tariff proposals raises a big question. If they go into effect would Trump have to pay more for all the clothing and hats he has made in China, or would the companies he buys from be exempt from the new tariffs?
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