Trade Off: Why There are No Winners in This Trade War
A recent meeting between President Trump and Chinese President Xi Jinping at the G20 in Buenos Ares claimed to establish a ceasefire in the trade war. Tariffs were halted by both countries and companies began to hesitantly look to resume normal trading patterns.
Less than a week later, a top executive at a Chinese tech giant was arrested at the request of the U.S. government. The trade war is expanding and it is time American legislators addressed it. The future of the American economy is at stake.
While tariffs can work to stabilize markets or effect price changes, the tariffs the President has imposed on adversaries and allies alike are short-sighted, irresponsible, and dangerous. We do have serious trade issues with China that need to be addressed, but a poorly-conceived trade war that negatively impacts our economy and working families is the wrong way to fix them.
Let’s first acknowledge the problem. We cannot stand idly by while China, one of our greatest economic competitors, regularly steals our intellectual property (IP) when we trade with them. This theft threatens our country’s technological advances in both the commercial and military sectors and we should respond aggressively.
But the right way to do that is holding China accountable under the World Trade Organization. America worked for years to force China to comply with the regulations necessary to join the World Trade Organization and they ultimately did; we should continue to use the leverage over them we worked so hard to build. Second, we should look to impose targeted sanctions on the worst Chinese perpetrators–not just slap blanket tariffs on Chinese goods, which dramatically increase costs for American businesses. Under blanket tariffs, many sectors of our economy will find themselves without the raw goods they rely on to stay in business.
Furthermore, the administration’s blanket tariffs push China towards making trade deals with other countries. A long-term result of trade wars is the emergence of new trading partners. Case in point: Since Trump has imposed these tariffs on Chinese soybeans, China has started selling their soybeans to Brazil at a lower cost than they had been in the U.S. We should also keep in mind that close trading partners rarely go to war with another. Trade wars can lead to full-on wars, and an already tense national security situation with China is worsened by this administration’s callous approach to the problem.
The effects of these tariffs at home are already being felt, with the tech, agriculture, and steel industries bearing the brunt of the administration’s ill-advised trade policy. The President argues that these tariffs are saving jobs. That is a lie. The tariffs on steel and aluminum will lead to a loss of 146,000 jobs. Another damning statistic is that for every one steel job the President “saves” with this trade war, five more will be cut by these tariffs. This is unacceptable.
Prices on everyday goods will increase as businesses have to pay more for imported, raw goods like steel and aluminum. Americans who are already struggling with rising healthcare costs and stagnant wages will need to factor in higher prices at the grocery store and across the retail sector.
The bottom line is simple: these tariffs are bad policy. The Trump administration claims we are winning from these trade wars, but the average American is losing. Now more than ever, Congress needs to be a check on the executive. I have introduced legislation that will aid fisherman as new tariffs threaten their businesses and will look for other actions to protect our workers from these harmful trade practices.