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US China Trade Dispute Negative Impact on Americans

US China Trade Dispute Negative Impact on Americans

US China Trade Dispute Negative Impact on Americans

In recent weeks, US Trade Representative Katherine Tai and other Biden administration economic officials have met with their Chinese counterparts in a flurry of talks. These talks are a promising start toward resolving tense ties between the two countries, which have been exacerbated by Trump-era policies aimed at recalibrating the trade relationship, which include tariffs, sanctions, tougher export restrictions, and foreign investment evaluations as per USA Wire. However, following these early discussions and reports of future talks on Wednesday it’s unclear what the next steps in US-China trade and investment talks will be.

While the Biden team is still undertaking a “top-to-bottom” assessment of China policies, Tai has stated that any tariff movement will be determined by three factors: discussions with China, the efficacy of the Phase One trade agreement, and US China strategy.

President Joe Biden

As Cabinet members and President Joe Biden prepare for further discussions, they should also consider a fourth factor. The price the US will continue to pay in terms of American jobs and competitiveness if it continues on its current course, particularly in light of the $370 billion in tariffs that remain in place.

US exports to China

Around 1 million American employments are supported by US exports to China on a regular basis. The trade war of the previous three years has provided a brief glimpse into a future in which the US and China purposefully undermine their business ties, and the vision that is emerging is not encouraging as reported by US Wire news. According to a study by Oxford Economics, the trade war cost the US around 245,000 jobs and $108 billion in lost GDP at its peak.

Remember, this was before Covid-19, which caused millions of Americans to claim for jobless benefits. The trade war has caught states and municipalities across the United States in the crossfire. States have been increasing trading links with China for years, resulting in complicated two-way relationships.

US-China trade

The importance of intimate local ties in facilitating US-China trade is sometimes overlooked in bigger policy debates. “We don’t have a foreign policy; it is the job of the federal government,” a California state official put it succinctly. However, we do have international contacts, which are tremendously essential to us.” According to a 2019 Business Roundtable report, international commerce supports up to one in every five California jobs, with about 146,000 jobs supported by exports to China.

Negative Impacts

While it is difficult to say whether the United States or China has suffered more as a result of the trade war, according to Moody’s Analytics, American businesses have borne more than 90% of the cost of US tariffs on Chinese exports. As the United States’ tariffs have increased, the price of Chinese imports has remained steady, implying that consumers and businesses in the United States are bearing the brunt of the tariff cost. It’s tempting to think of this as a zero-sum game, as if cooperating or collaborating with China will only undermine the United States’ competitiveness. However, American high-tech firms have been operating in China for decades.

US corporations in China

They primarily sell to consumers in those markets, operating “in China, for China” or “in China, for Asia.” Eighty percent of items manufactured by US corporations in China are sold in China, with only 7% exported to the US and the rest going to other nations. The Chinese market is massive in size according to republican news sources. If American corporations are barred from operating in China, Japanese and European competitors, as well as Chinese indigenous firms, will quickly replace them. If American businesses are barred from competing in China, our competitors will be able to use China’s economies of scale and rapid technological adoption to outcompete us everywhere else, including in our home market.

The post US China Trade Dispute Negative Impact on Americans first appeared on Tekrati and is written by drcherylpruitt

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