Donald Trump is calling his plans to impose global tariffs on foreign goods a way to protect America from exploitation.
But by doing so he is actually starting a “war on trade,” writes By Peterson Institute for International Economics trade expert Alan Wolff.
Republican presidential candidate A Global import duty is 10 percent For all goods entering the United States. For Chinese products, these import duties can be as high as 60 percent.
But before America embraces this example of protectionism, an American think tank believes it would do well to look at history.
earlier Great Depression Something similar happened in the 1930s, when struggling American farmers called for tariffs on foreign agricultural products.
It resulted 1930 Tariff Act, which ended up being more ambitious than initially thought. Apart from agricultural products, a whole range of sectors were ‘protected’ with import tariffs rising to an average of 47 per cent.
Other countries responded almost immediately, and before the U.S. tariffs took effect, more than a dozen countries imposed their own tariffs on U.S. goods. According to Wolff, the United Kingdom imposed import duties of up to 50 percent within a year.
“Economists agree that those high rates made the Great Depression significantly worse,” he writes. “Unemployment in America has risen to 25 percent and we have almost lost our democracy.”
The United States currently applies relatively low general import tariffs
Currently, U.S. import tariffs average 3 percent, a far cry from the very high tariffs of nearly a century ago. But if Trump is re-elected president, his experiments with protectionism could change that significantly.
Trump’s proposed import tariffs could cost US consumers more, according to Peterson Institute research Expenses will be incurred About 500 billion dollars per year. According to another estimate, Americans Spend an extra $1,500 a year per family Due to high import duty.
Other academics, such as Harvard economist Kenneth Rogoff, have warned about the surplus inflammation a;Effect of increasing import costs.
Wolff isn’t the only one who thinks a trade war could break out. Other experts agree with this, but argue that it can happen It doesn’t matter who the new president is Manufactured in the USA. This certainly applies to the relationship between the US and China.
China has significantly increased industrial production of solar panels and electric cars. While that higher production is intended to stimulate the Chinese economy, Beijing is now sitting on a huge mountain of goods that China needs to dispose of somewhere.
“They need to speed up the export engine,” said Leland Millan, director of the think tank China Beige Book. In the month of March. “It’s going to cause a lot of global and political problems, and that’s why I think we’re going to end up in a trade war next year.”
Indeed, as President Biden announced last month, the United States has already responded A series of import duties on Chinese goods.
While Biden’s actions seem strong, they pale in comparison to Trump’s plans. For example, a 50 percent import tariff on Chinese semiconductors is extreme, but it is aimed at a trade involving about $1 billion a year.
“Unlike Biden’s tariffs, Trump’s plan is to raise taxes on all countries. It’s not just ‘America First,’ but ‘America Alone,'” Wolff writes.