China’s record trade surplus with the US shows Trump’s strategy is “failing”
Trump recently started a trade war with China, putting large tariffs on Chinese goods in order to lower the trade deficit between the US and China. So far though, it does not seem to be working. The trade deficit is reaching record highs this year. The deficit reached 34.1 billion this September, which is 13% higher than in 2017. So it does not seem that Trump's strategy is working. In fact, China has fought Trump's tariffs by purposely exporting more into the US and importing less, making up for where the tariffs should have made a difference. Trump's tariffs are hurting Chinese economy though, the IMF predicts that the tariffs could cause a loss of growth of 2% for China in the coming years. Though China isn't the only one hurt by these tariffs. Ford reported that they lost upwards of $1 billion due to the tariffs, which will cause lay-offs.
I think that President Trump may need to rethink his strategy. While, with time, we may see the tariffs work and the trade deficit decrease, this is not guaranteed, and so far there are no signs of it happening. In fact the trade deficit has just continued to grow. I think Trump should rethink negotiating with China in order to come to a better trade relationship so that China might export less to the US, as right now they are fighting the tariffs by exporting even more than they did to the US. Trump came out strong in this trade war, implementing very high tariffs. I think that he should have started with negotiating with china and if that did not work he may have implemented slightly lower tariffs than he has now, in order to show China he was serious, without overly angering them.
https://www.vox.com/2018/10/12/17967422/china-trade-war-us-trump-deficit
https://www.vox.com/2018/10/12/17967422/china-trade-war-us-trump-deficit
I agree with your statement, and I firmly believe that we need to reach a bilateral trade agreement between the U.S. and China so that we may address these trading issues while causing minimal damage to both economies. While increasing tariffs will increase the real income in the short term, trading conflict between the U.S. and China is not worth the potential meager gains to real income due to the Chinese altering their own trading strategy to maintain if not increase their terms of trade. President Trump has reached revised trading agreements with several other nations through is aggressive policy, however, the Chinese are less willing to negotiate when threatened. The only way to preserve the terms of trade and encourage growth in both nations is for President Trump to broker peace via a bilateral agreement with President Xi of China.
ReplyDeleteI think that there is room for improvement within the trades with China and the U.S. Both President Trump and President Xi need to come to a mutual agreement instead of creating barriers and tariffs among one another. With a mutual trade with each other, each country will have their own benefits causing minimal harm to each others economies. If President Trump can use less aggression and threats on tariffs they will pose on the Chinese, then President Xi might have a way they might be able to get along within trade.
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