Trump’s Trade War Results
Put plainly, Trump’s trade war with China ended in Failure. The purpose of imposing tariffs on goods imported from China was to reduce the U.S. trade deficit, boost American exports, and slow China’s rise as a global superpower. Here’s what actually happened…
- American companies were forced to accept lower profit margins
- U.S. companies cut jobs
- Prices went up on many consumer goods
- The U.S. trade deficit widened to its largest on record
- Foreign direct investment to the U.S. fell
Meanwhile in China:
- China’s trade surplus last year hit a record $535 billion, up 27% from 2019
- Foreign direct investment to China rose by 4%
- China’s trade surplus with other countries increased
If you don’t call that a backfire, then I don’t know what is.
Biden’s US-China Trade Plans
On Friday, Katherine Tai, Biden’s nominee to serve as the United States Trade Representative, was questioned by the Senate Finance Committee. Based on her responses, it is likely that the new administration plans to build on the accord brokered by its predecessor rather than scrap it.
China “needs to deliver” on the promises it made in the phase one trade agreement, Tai told the senate committee. China missed its 2020 phase one trade deal targets as the global pandemic upended shipping and supply chains. She acknowledged that former officials have tried before to achieve structural changes in China’s economy and faced obstacles, saying the Biden administration needs to be “exploring all our options.”
Trump tariffs are still applied to about $335billion of Chinese goods. It is still unclear if any of these tariffs will be lifted under the new administration.
Blacksmith will continue to update our clients as China-trade relations evolve under the new administration. If you have any questions about how tariffs affect your business, then contact a Blacksmith product expert today.