Chinese Data on Trade Shows Imports From America Have Fallen in 2019 | Citizens Against Government Waste

Chinese Data on Trade Shows Imports From America Have Fallen in 2019

The WasteWatcher

About a year ago, President Donald Trump’s administration imposed heavy tariffs on foreign manufactured aluminum and steel.  This triggered a domino effect of retaliatory tariffs with China.

The administration’s protectionist moves have scared American businesses and investors. In all, the U.S. has put tariffs on $250 billion of Chinese goods.  The administration has justified these tariffs by claiming that trade protectionism creates domestic jobs.  However, that anecdotal claim is untrue.

The United States has enjoyed over 100 consecutive months of job growth which means the economy’s performance cannot be attributed to the policy shift on trade last year.  Further, most of those jobs are in services and not manufacturing.

Trade figures released by China earlier today show that President Trump’s efforts to cut the U.S.-China trade deficit are failing. The trade deficit, which Mr. Trump cites as evidence of America’s mistreatment by China, has continued to grow.  Chinese imports of American goods is down 11% so far this year; yet, tariffs have not slowed the import of Chinese goods into the U.S.  American companies have lost market access due to Beijing’s retaliatory measures.

Tellingly, U.S. consumer sentiment has fallen for the first time in three months.  The decline in sentiment reflects a weakening outlook for the U.S economy.  Enthusiasm over tax cuts has waned, and the long-term economic outlook has dropped to its lowest point in more than a year.  More troubling, U.S. manufacturers are not filling vacant positions and are closing factories.  A recent survey by the Motor and Equipment Manufacturers Association has found the highest level of pessimism among its members since the economic downturn in 2008.

Some estimates show that the administration’s tariffs have generated annual losses of $68.8 billion (.37% of GDP) for U.S. importers while U.S. domestic producers have lost $7.8 billion annually (.04% of GDP).  American domestic producers would have been hurt a lot more if not for the government’s repeated bailout programs.

As the administration’s tariffs continue to weaken the U.S. economy, some in Congress want to increase Mr. Trump’s ability to impose duties.  Rep. Sean Duffy (R-Wis.) has introduced a bill that would expand the president’s power to raise tariffs.  This is a bad idea.

There are clear costs to trade conflict.  Beyond the effects on the U.S. economy and job growth, there are broader international ramifications.  Key U.S. trade allies are seeking more predictable partners elsewhere, while the U.S. confronts a record level of trade litigation in Geneva.

The United States’ trade war with China has been a hinderance to its economic prosperity.  The tariffs have been destabilizing and created fiscal uncertainty.  A prolonged confrontation between Washington and Beijing would only increase the terrible effects the tariffs have had on U.S. manufacturing, agricultural, and energy goods.

U.S. Treasury Secretary Steven Mnuchin announced this week that the U.S. and China have agreed on a mechanism to implement any trade agreements made between the two countries.  The new enforcement offices would police ongoing trade issues.  This is hopefully a sign that the dispute between the world’s two largest economies is coming to an end.  Whatever happens, the U.S. economy has already been significantly harmed by the year-long trade battle.