By: Azhar Azam
*This is one of my opinion pieces (unedited) that first appeared in "Express Tribune":
https://tribune.com.pk/story/2030365/6-trumps-global-war-trade/?fbclid=IwAR2pn74Q21UCaaXL0WcqxpFszBFhoxASXtB85crxOMoVMdqZufSWqoaq0xQ
The US President Donald Trump once again popped up on twitter with his impulsive and impatient brashness over China and announced to place 10% additional tariffs on the remaining $300 billion of Chinese goods starting September 1.
While conceding to have constructive talks between the US and Chinese officials about a future trade deal, Trump rationalized his tariff placement in a comeback to Beijing’s’ reluctance to buy US agriculture products in large quantities and to stopping fentanyl exports into the US.
Chinese foreign ministry spokesperson Hua Chunying dubbed the act as a serious violation of the consensus reached by the Chinese and US Presidents at G-20 summit in Osaka and threatened to take necessary countermeasures. “We do not want a trade war, but we are not afraid of fighting one,” she added.
As Trump historically hasn’t retreated from his tariff misadventures, his provocative action would break the trade truce with China and would invite Beijing to take retaliatory measures. Hence, the tensed situation could dramatically escalate of trade war between the two largest economies of the world.
It is shocking that at a time while the China-US trade negotiations were sailing smoothly towards a decisive trade deal; Trump rushes down with a series of grating tweets. The hasty but expected proclamation elaborates that the kernel of Trump’s tariff strategy has a political backdrop.
Unwinding US military engagements in foreign countries such as in Afghanistan and trade deals with China, European Union (EU), Japan, and Mexico were Trump’s key promises to the American public during his previous presidential campaign.
But to date, he has only been able to accomplish a trade agreement with Mexico. As he has set September as a deadline to arrive on a peace deal with Afghan Taliban, he is desperate to strike trade pacts with China, Japan, and EU.
Therefore, Trump administration is actively pursuing to conclude a preliminary peace agreement with Taliban, to reach a limited trade agreement with Japan, and to partially settle trade disputes with EU, all later this month. While the new tariffs on Chinese goods would take effect from September 1, Trump craves to pull the plug on trade strains with Beijing quickly.
As US presidential canvassing would soon flare-up into a full-blown politicking, the looming peace and trade agreements would help Trump to effectively run and fast-track his 2020 presidential campaign with some achievements on his back. The success on these issues would definitely aid Trump to lodge into the White House for another term.
But the Trump’s political gambles meanwhile are hurting the US economy. As the fresher tariffs bill to penalize Chinese consumer electronics, clothing, shoes, and toys – American buyers of the Chinese goods have to be the definitive victims of Trump’s strident actions.
Trump’s prior 25% tariffs in May on $250 billion of Chinese goods were expected to have cost $500 per American household annually. If the new tariffs are implemented, it would cost American families roughly $700 and $900 per year respectively additionally, Oxford Economics told Newsweek. The Peterson Institute reckons it to be even higher, $1,270 per annum.
Retailers will be the prime target of novel tariffs, which will stumble when the new levies go into effect as they “disproportionately impact apparels, footwear, consumer electronics, and toys,” said Kate McShane of Goldman Sachs in a note to his clients.
Immediately after Trump’s tariffs announcement on imports from China, the shares of retailers on the Wall Street also tanked by 3%. The experts on the Wall Street are also unanimously united is that the Departmental Stores are exposed to substantial risks.
The US Chamber of Commerce has shown its disappointment on Trump’s tariffs hike as well. “Raising tariffs by ten percent on an additional $300 billion worth of imports from China will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy,” a statement of the organization’s executive vice president said on Thursday.
Stock markets the world over were also apprehensive of Trump’s abrupt decision to whack additional tariffs on Chinese goods. The London’s Financial Times Stock Exchange (FTSE) 100 Index or “Footsie”, French stock market, German Dax Index, and Nikkei all witnessed nervous investors’ reactions and sank sharply.
So Trump’s self-initiated trade war with China not only preys on his voters and haters equally but it would also put a squeeze on the US economy and GDP that would be subject to contract over flagging purchasing power of the townsfolk spread out across the country.
In addition, as a result of the US President’s irrational and unscrupulous trade war, the US multinational companies would be forced to shift their manufacturing plants in the nearby countries – thereby losing manufacturing jobs to the US, the crux of Trump’s campaign towards China.
Trump’s global war on trade might perhaps help him to regain a political win in the coming elections and another term as a US President but by the time, the damage to the US economy and the American buyers could have been irreversible.
*This is one of my opinion pieces (unedited) that first appeared in "Express Tribune":
https://tribune.com.pk/story/2030365/6-trumps-global-war-trade/?fbclid=IwAR2pn74Q21UCaaXL0WcqxpFszBFhoxASXtB85crxOMoVMdqZufSWqoaq0xQ
The US President Donald Trump once again popped up on twitter with his impulsive and impatient brashness over China and announced to place 10% additional tariffs on the remaining $300 billion of Chinese goods starting September 1.
While conceding to have constructive talks between the US and Chinese officials about a future trade deal, Trump rationalized his tariff placement in a comeback to Beijing’s’ reluctance to buy US agriculture products in large quantities and to stopping fentanyl exports into the US.
Chinese foreign ministry spokesperson Hua Chunying dubbed the act as a serious violation of the consensus reached by the Chinese and US Presidents at G-20 summit in Osaka and threatened to take necessary countermeasures. “We do not want a trade war, but we are not afraid of fighting one,” she added.
As Trump historically hasn’t retreated from his tariff misadventures, his provocative action would break the trade truce with China and would invite Beijing to take retaliatory measures. Hence, the tensed situation could dramatically escalate of trade war between the two largest economies of the world.
It is shocking that at a time while the China-US trade negotiations were sailing smoothly towards a decisive trade deal; Trump rushes down with a series of grating tweets. The hasty but expected proclamation elaborates that the kernel of Trump’s tariff strategy has a political backdrop.
Unwinding US military engagements in foreign countries such as in Afghanistan and trade deals with China, European Union (EU), Japan, and Mexico were Trump’s key promises to the American public during his previous presidential campaign.
But to date, he has only been able to accomplish a trade agreement with Mexico. As he has set September as a deadline to arrive on a peace deal with Afghan Taliban, he is desperate to strike trade pacts with China, Japan, and EU.
Therefore, Trump administration is actively pursuing to conclude a preliminary peace agreement with Taliban, to reach a limited trade agreement with Japan, and to partially settle trade disputes with EU, all later this month. While the new tariffs on Chinese goods would take effect from September 1, Trump craves to pull the plug on trade strains with Beijing quickly.
As US presidential canvassing would soon flare-up into a full-blown politicking, the looming peace and trade agreements would help Trump to effectively run and fast-track his 2020 presidential campaign with some achievements on his back. The success on these issues would definitely aid Trump to lodge into the White House for another term.
But the Trump’s political gambles meanwhile are hurting the US economy. As the fresher tariffs bill to penalize Chinese consumer electronics, clothing, shoes, and toys – American buyers of the Chinese goods have to be the definitive victims of Trump’s strident actions.
Trump’s prior 25% tariffs in May on $250 billion of Chinese goods were expected to have cost $500 per American household annually. If the new tariffs are implemented, it would cost American families roughly $700 and $900 per year respectively additionally, Oxford Economics told Newsweek. The Peterson Institute reckons it to be even higher, $1,270 per annum.
Retailers will be the prime target of novel tariffs, which will stumble when the new levies go into effect as they “disproportionately impact apparels, footwear, consumer electronics, and toys,” said Kate McShane of Goldman Sachs in a note to his clients.
Immediately after Trump’s tariffs announcement on imports from China, the shares of retailers on the Wall Street also tanked by 3%. The experts on the Wall Street are also unanimously united is that the Departmental Stores are exposed to substantial risks.
The US Chamber of Commerce has shown its disappointment on Trump’s tariffs hike as well. “Raising tariffs by ten percent on an additional $300 billion worth of imports from China will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy,” a statement of the organization’s executive vice president said on Thursday.
Stock markets the world over were also apprehensive of Trump’s abrupt decision to whack additional tariffs on Chinese goods. The London’s Financial Times Stock Exchange (FTSE) 100 Index or “Footsie”, French stock market, German Dax Index, and Nikkei all witnessed nervous investors’ reactions and sank sharply.
So Trump’s self-initiated trade war with China not only preys on his voters and haters equally but it would also put a squeeze on the US economy and GDP that would be subject to contract over flagging purchasing power of the townsfolk spread out across the country.
In addition, as a result of the US President’s irrational and unscrupulous trade war, the US multinational companies would be forced to shift their manufacturing plants in the nearby countries – thereby losing manufacturing jobs to the US, the crux of Trump’s campaign towards China.
Trump’s global war on trade might perhaps help him to regain a political win in the coming elections and another term as a US President but by the time, the damage to the US economy and the American buyers could have been irreversible.