Here is Trump’s all-tariff plan against China
In the Platform for 2024 the Republican Party announces its intention to introduce heavy tariffs on trade with China. But Trump's vision could also have repercussions on the US economy. All the details
On Monday the Republican Party presented its Platform for 2024 and therefore the agenda for a possible second Trump presidency. But more than the unusually soft tones on the heated issue of abortion, what attracted Axios ' attention were the measures announced on an equally hot issue such as trade with China . Here's what Trump will do if elected – spoiler: tariffs galore – but also the costs that according to some economists will end up falling on the entire Stars and Stripes system.
Duties, duties, duties
The Platform adopted on Monday by the Elephant Party, writes Axios, fully embraces Trumpian protectionism, announcing in particular the intention to introduce heavy duties on all goods imported from abroad and to limit those same imports as much as possible if they arrive from Beijing.
The digital newspaper recalls that the Republican candidate has already revealed his cards, which will consist of a 10% duty on all imported goods and 60% on Chinese ones.
Those rates, Axios underlines, have no parallels either in American history or in that of other countries, but above all they constitute for the Chinese side an escalation compared to the offensive launched by Trump 1 which imposed duties on specific lists of products and set between 10 and 15%.
The theory
Those who know the history of the New York tycoon and his economic doctrines well know that his obsession and that of his main advisors is that of the trade balance which has been perpetually in the red for decades.
For the Trumpists it is a question of resolving once and for all the so-called "Chinese shock" that came on the scene in the 2000s when what was then called the factory of the world flooded the American market with low-cost goods.
But not everyone agrees in defining that turning point as negative, which on the one hand set in motion the process of decline of the US manufacturing base, on the other hand had a more than beneficial effect on the prices paid by consumers and on inflation.
What if Trump wins?
Therefore, if The Donald were re-elected and kept his electoral promises, the consequences, according to trade experts interviewed by Axios, would be that the price of many imported goods would rise significantly without, however, it is underlined, causing an automatic rebirth of US industry.
Using analysis from the Peterson Institute for International Economics, Axios highlights that the cost of Trump's tariffs would be as much as $1,700 for a middle-income family.
Goldman Sachs' warning
The economists at Goldman Sachs then thought about it, Axios reports, to warn everyone, calculating the cost of Trump's tariffs in an increase of 1.2 percentage points in inflation.
But for Goldman Sachs that's not all, because the duties would also have the effect of subtracting half a point of GDP growth.
What would happen?
If Trump were to succeed and launch his trade offensive, US companies that usually import goods from the Dragon would have very few options available.
To compensate for those sky-high tariffs they would have to raise prices significantly or tolerate lower revenues, or perhaps a combination of the two solutions.
The alternative would be to change suppliers by turning to other countries that produce at low costs such as Vietnam, Thailand or Mexico. But even in this case there would be problems not only because duties would also be imposed on these transactions but above all because global value chains do not change overnight.
In any case, according to Axios, if the goal of a second Trump administration is to bring production back to America, this process would be neither automatic nor painless: among the problems that companies would have to face are those of the creation of new production plants, The inevitable growth in labor costs and the difficulty in finding specialized labor in a labor market where this resource is scarce.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/donald-trump-programma-dazi-cina/ on Sat, 13 Jul 2024 05:38:39 +0000.