Trump continues to play hard ball with China on the matter of trade. After issuing tariffs on $50 billion worth of Chinese goods earlier this year, plenty of time has passed for it to be understood that Trump means business when it comes to America getting a fair deal. By Trump’s new order, apparently it was enough time without action. Tariffs are to be placed on an additional $200 billion worth of Chinese goods.
“China has had many opportunities to fully address our concerns,” acknowledged Trump in his statement on the latest tax. “Once again, I urge China’s leaders to take swift action to end their country’s unfair trade practices.”
Many economists and skeptics have criticized Trump’s aggressive trade relations for the impact tariffs are to have on the consumer. While prices are undeniably to go up in response to taxes, Americans are more than just consumers. Trump instead focuses on the other component of an individual’s economic role in society.
The president suggests if China wants “to make a deal...from our standpoint, it has to be fair. It has to take care of our workers.” A worker first mentality dominates Trump’s economic strategy whenever he considers the prosperity of Americans. By the president’s philosophy, if trade relations with other countries are a net loss for the American worker, then strict action must be taken in order to correct this problem.
The new line of tariffs are to go into effect on September 24, less than a week from today. The rate will start off as 10% tax on $200 billion worth of Chinese goods, and will increase to 25% tax at the end of the year. This correlates to billions of dollars in US federal income. Once the 25% kicks in, that equates to an annual increase of $50 billion in additional tax revenue.
“It will be a lot of money coming into the coffers of the United States of America. A lot of money coming in,” acknowledges the president.
China could potentially retaliate, but is running out of room to keep up with a tit for tat strategy. China only imports $187.5 billion worth of US goods and services every year, compared to the US importing $522.9 billion. The sizable trade deficit of $335.4 billion well explains Trump’s stress for fair trade.
However, in the particular matter for the newly imposed tariffs, China does not even import enough US goods to match Trump’s recent advancement in trade tactics. Even if China retaliated in some lesser fashion, there still exists over $250 billion worth Chinese goods that Trump has yet to target with tariffs. This is a rather important note, for Trump has threatened to impose further tariffs if Beijing attempts to strike back with economic measures of their own.