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Experts Say Trump Tariffs May End Up Helping China

U.S. President Donald Trump is after signing a proclamation to establish tariffs on imports of steel and aluminum at the White House in Washington, March 8, 2018.
Experts Say Trump Tariffs May End Up Helping China
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Some economic experts are saying United States plans to put tariffs on billions of dollars of Chinese goods could end up helping China.

U.S. President Donald Trump has accused China of permitting unfair trade policies that hurt the U.S. economy and its workers. Trump has also said he wants the U.S. trade deficit with China to be reduced.

Recently, Trump announced plans to place new tariffs on steel and aluminum. He said the tariffs were meant to protect the U.S. steel and aluminum industries, which are important to national security.

Steel imports to the U.S. would be subject to a 25 percent tariff, while aluminum would face a 10 percent tariff.

Canada and Mexico do not have to pay the new tariff. Many other steel and aluminum exporting nations have said they also want to avoid it.

A Chinese employee sorts hot red steel at a steel plant in Zouping in China's eastern Shandong province on March 5, 2018.
A Chinese employee sorts hot red steel at a steel plant in Zouping in China's eastern Shandong province on March 5, 2018.

The U.S. administration is also currently considering putting additional tariffs on up to $60 billion of Chinese goods, Reuters news agency reports. Those new tariffs would be placed on products in the technology and telecommunications industries, Reuters cited officials as saying.

The plans to put new tariffs on Chinese goods reportedly came as the result of an investigation launched last year into violations of intellectual property rules by China.

In addition, a White House spokeswoman said the administration is requesting that China take steps to reduce its trade imbalance with the U.S. Officials have set a target for China to cut its U.S. trade surplus by at least $100 billion, she said.

Last week, President Trump tweeted that China had been asked “to develop a plan for the year” to reduce the trade imbalance by $1 billion. “Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” the tweet said.

The White House spokeswoman said Wednesday that the amount was actually $100 billion.

The U.S. Census Bureau says the U.S. trade deficit with China reached a record $375 billion in 2017. That number is two-thirds of the U.S. trade deficit with all its trading partners.

China has estimated its 2017 U.S. trade surplus was $276 billion. That is equal to two-thirds of its trade surplus, of $422 billion, with all other countries, Reuters reports.

Some economic experts are saying that some tariffs meant to punish China might end up helping the Chinese. They say this is because some of the latest American policies - such as the tariffs on steel and aluminum – affect other nations as well.

One example is the European Union, or EU. The EU in the past has joined with the U.S. to dispute Chinese trade policies both considered unfair.

Christopher Balding is a professor of economics at Peking University’s HSBC Business School. He says recent Trump administration decisions on tariffs are likely to change current world trade alliances.

Steel coils sit on wagons when leaving the thyssenkrupp steel factory in Duisburg, Germany, March 2, 2018.
Steel coils sit on wagons when leaving the thyssenkrupp steel factory in Duisburg, Germany, March 2, 2018.

“One of the biggest problems with recent Trump actions is that it seems to very much alienate many countries who have nearly identical interests in confronting Beijing and their strongly protectionist trade regime.”

Balding added that this could make EU members and some other nations less willing to support Trump when his administration is also placing tariffs on them.

In December, trade ministers from America, the EU and Japan promised to cooperate on efforts at the World Trade Organization. They said they would fight Chinese trade policies they consider unfair such as state support for exporting companies. They say this support permits the companies to sell products at a lower cost.

Jacob Kirkegaard is with the Peterson Institute of International Economics. He told VOA cooperation with other members of the Organization for Economic Cooperation and Development could change because he thinks the new situation is clearly helping China.

“There is no doubt that the splitting of the OECD (Organization for Economic Cooperation and Development) or Western camp, on trade disputes - because of the unilateral decision of the Trump administration - is a benefit to China.”

Chinese officials have repeatedly said they do not want a trade war to break out with the U.S. But they have also said in several statements they would take measures to protect Chinese trade interests if U.S. actions are seen as threatening.

I’m Bryan Lynn.

Saibal Dasgupta reported this story for VOA News. Bryan Lynn adapted it for Learning English, with additional material from Reuters and the Associated Press. Mario Ritter was the editor.

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Words in This Story

tariff n. a tax on goods coming of leaving a country

retaliate v. to take negative action in response to negative action

intellectual property n. work or invention that is the result of creativity such as a design, a manuscript, software, etc. that one has copyright or trademark

surplus n. a situation in which a country sells more to other countries than it buys from other countries

deficit n. situation in which a country buys more from other countries than it sells to other countries

alienate v. to cause to become isolated or apart from the group

confront v. to oppose or challenge, often in a direct and forceful way

unilateraladj. involving only one group or country

benefit n. something that helps or provides an advantage