Opposition and condemnation from American society poured to Washington’s latest announcement to hike tariffs on Chinese imports, as they said that such a decision would only hurt the US economy.
Even though China and the US are going through trade talks, the Office of the United States Trade Representative (USTR) declared on May 8 that starting from May 10, tariffs on $200 billion of Chinese imports will go up from 10 percent to 25 percent.
In a statement issued on May 7, the American Soybean Association called on the US government to hold off on additional tariffs and expressed its expectation that the latter can negotiate a better trading relationship with China.
Additional tariffs will only hurt US families, US workers, US companies and the US economy, warned Rick Helfenbein, president of American Apparel & Footwear Association.
President of the US Consumer Technology Association Gary Shapiro agreed, saying that implementing the 25-percent tariffs would roil the markets and damage US businesses.
A sudden tariff increase would severely disrupt US businesses, especially small companies that have limited resources to mitigate the impact, said David French, senior vice president of government relations for the National Retail Federation.
“American consumers will face higher prices and US jobs will be lost,” French noted.
The 25 percent tariff on the $200 billion in Chinese imports, along with existing duties on $50 billion in Chinese shipments and on steel and aluminum, would reduce US employment by 934,000 and cost the average family of four $767 a year, found a study by the Washington-based consulting firm Trade Partnership.
The Wall Street Journal believes items that will be subject to higher tariffs soon would place a huge impact on American consumers, as the affected cover a wide range of consumer products, including grocery items, textiles, clothing, sporting goods, soap, lamps and air conditioners.
Recently, the University of Chicago and the Federal Reserve Board used a case of washing machines to illustrate what impacts on consumer goods would be caused by higher tariffs.
The results showed that the price of washing machines was raised by 12 percent since the US imposed higher tariffs on imported washing machines from January 2018. The tariffs cost American consumers an additional $1.5 billion a year, raising the price of a washing machine by $86 and a dryer by $92.
Another study jointly conducted by economists from the Federal Reserve Bank of New York, Columbia University and Princeton University suggested that the tariffs imposed on steel and aluminum, solar panels and Chinese imports were placing burdens on American consumers and enterprises, reducing US income at a rate of $1.4 billion per month.
Besides, the US farmers are also hit by the raised tariffs which severely threatened their livelihood. Last year, the net farm income of the US dropped by 12 percent, with plummeting prices of soybeans, pork, dairy products and wheat. What’s worse, the rising equipment prices sharply narrowed their margins.
Dale Fjell, Director of Research at Kansas Corn Growers Association told People’s Daily that the sales slide and income reduction are resulted from not only the tariffs, but also rise of equipment cost, since most of the farmers’ income was invested in farming machines.
Steel and aluminum, which are necessary materials for the building of warehouses that store farming machines, are subjected to additional tariffs, Fjell explained, adding that the farmers had to face such cost rise.
He said the farmers have always been waiting for good news but what they get is disappointment, adding that he doesn’t know how long the situation will last.
The Economic Research Service under the United States Department of Agriculture estimated that the trade war might reduce the agriculture trade of the US in the 2019 fiscal year to a lowest since 2007, partly due to the possible large decrease of export to China.
The trade frictions between the two largest economies in the world also triggered concerns for global economic growth. Both the International Monetary Fund and World Bank recently cut forecast for world economic growth. The World Trade Organization also downgraded its expectation for the global trade growth in 2019 from 3.7 percent to 2.6 percent, the lowest in the recent three years.
Gian Maria Milesi-Ferretti, Deputy Director in the Research Department of the International Monetary Fund told People’s Daily that trade barriers would break global supply chain.
The US trade policy and the tension it creates are one of the major threats faced by the current world economy, he said.