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INEFFECTIVE TARIFFS
Why U.S. Tariffs on China Are Losing Their Bite in a Changing Global Economy?
With China’s trade reliance shifting and South-South partnerships booming, U.S. tariffs may be reshaping global trade more than disrupting it
The newly sworn-in President Trump appears to be adjusting his stance as the economic implications of imposing tariffs on the U.S.’s largest trading partners come into focus. Despite his earlier pledge to enforce tariffs on Canada, Mexico, and China at rates of 25% and 60%, respectively, on Day One, Trump has postponed the implementation to February 1. Moreover, his tone toward China has notably softened, with a revised proposal suggesting a reduced tariff rate of just 10%. There may be compelling reasons driving this shift.
The Changing Effectiveness
United States’ decision to impose tariffs on Chinese exports has been a contentious tool in its economic strategy. However, the effectiveness of these tariffs, especially under the current economic conditions, appears to be diminishing compared to their initial impact in 2018.
At that time, the U.S. launched a trade war by levying tariffs of up to 25% on $250 billion worth of Chinese…