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The “Trade-Off” of U.S. Tariff War with China

President Donald Trump issued new tariffs on approximately $200 billion worth of Chinese goods, on Monday, Sept. 17.

The first cycle of ten percent tariffs were already been in effect since Monday, Sept. 24.

The administration’s recent tariffs are set to reach a rate of 25 percent by Jan. 1, 2019, and come in addition to the $50 billion worth of goods that were already taxed earlier this year.

In response to the first round of tariffs, China countered by implementing tariff’s they import from the U.S.

As a result, the Trump administration enacted the new tariffs. Nearly half of all Chinese imports to the U.S. now have levies or tariffs on them.

The tariffs will only affect certain Chinese goods; selective products established or listed by the Trump administration.

The first round of tariffs focused primarily on industrial equipment, whereas these tariffs affect a range of products such as electronics, food, and clothing.

Kenneth Mitchell, Ph.D., Chair of the Department of Political Science and Sociology, explained that it is important to keep in mind that China and the U.S. are two of the biggest economies in the world.

“The United States has the largest consumer market,” said Mitchell. “And those that have the largest consumer markets [are the ones] who get to make the rules.”

Mitchell further explained that because the U.S. has the largest consumer market, these tariffs would ultimately hurt the companies and businesses producing the products, more than they would hurt consumers.

“I don’t think it’s that bad,” he said. “Trump slashed the corporate tax rate from 35 percent to 20 percent [in efforts for corporations to have more money to invest] and we are not seeing the prices go up now.”

However, Mitchell did note that Trump is borrowing money at historic highs, in comparison to previous presidents, due to the tax cuts.

“Until there is some consequence[s], there is no reason to stop them,” Mitchell added, when asked how long he believes that these tariffs would remain in place.

Robert Scott, III, a professor of economics and finance, stated that the result of these tariffs are difficult to predict right now.

Because many companies have been moving or relocating business outside of the U.S., Scott explained that Trump’s aim to placing these tariffs is to try to bring back some of those companies that moved offshore, and to discourage other businesses and companies to moving offshore.

“Between automation and the difference in wages, the jobs will either be automated or taken somewhere else,” he said.

“I believe that American consumers are indirectly responsible for poor Chinese working conditions,” said Scott, explaining that these tariffs, “might help fix other issues or cause changes” in China such as working conditions or environmental policy.

One of the issues during the 2016 presidential election was the issue dealing with trade with foreign countries, especially China.

Trump repeated statements as to how NAFTA and the proponents were a bad deal for the United States.

Landon Myers, a senior political science student with a minor in economics, said, “[Trump’s] choice of actions is wrong, but action needs to be taken.”

Both Mitchell and Scott agree with Trump’s tariffs, explaining that the U.S. has the upper- hand, because it has the largest consumer market and because of China’s recent stagnation in economic growth.

Although it remains to be seen what the result of these tariffs will be, Scott concludes that they could end up being beneficial for both the U.S. and China or, “end up in total disaster.”