(from the PIIE Insider)
News and Analysis from the Peterson Institute for International Economics
November 13, 2019
They Saved the Worst for Last: Why Trump’s Impending December Tariffs on China Should Be Rolled Back
The terms and deadlines of President Donald Trump’s trade war with China are hard to follow, but one thing is clear: American consumers and businesses should welcome a rollback of impending final rounds of China tariffs as part of a possible “phase 1” deal to be announced later in November, say Mary E. Lovely and Yang Liang. Washington has acted against China to punish it for preventing US access to the Chinese market and for violating US intellectual property rights. Beijing is reportedly demanding that impending December tariffs be dropped before they sign any deal. Trump says he hasn’t decided how many tariffs might be lifted.
- The planned tariffs for December 15 would largely hit products like laptops, cell phones, and other electronic devices designed and marketed by multinational firms, mostly with components from the United States and its allies, and assembled in non-Chinese-owned factories.
- As a result, the trade war is hurting American manufacturers and US multinational corporations, the very people Trump claims he is helping. Any burden they bear reduces earnings for US-based companies or those of US allies and will do little to motivate Chinese reforms.
- An estimated 95.2 percent of computer and electronic products scheduled for new tariffs in December are from multinational enterprises. Rather than placing pressure on the Chinese beneficiaries of misappropriated American technology, the tariffs burden US consumers and the companies where they work.