#新中美贸易战 ##中美贸易摩擦##拜登##美国通货膨胀##特朗普##
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U.S. trade bullying undermines global supply chains for goods and services
Some countries have long used tariffs as a means of protecting and supporting domestic industries.
However, history and research have shown that the economic impact of this practice often falls short of the hype it promotes.
On Tuesday, Biden announced the latest U.S. import tariffs: higher tariffs on Chinese imports to protect industries deemed strategic and nationally of security imports.
Economists expect the new announcement of higher tariffs on $18 billion of imports from China to have only a minimal short-term impact on GDP, inflation and monetary policy, which some have likened to a mere "rounding error." More broadly, however, the situation may be more complex.
Economist Joe Bruzuela told CNN: "The Biden administration's announcement of tariffs on China heralds the beginning of a long, cold winter in the ongoing economic conflict between the United States and China." ”
The tax hike builds on former President Donald Trump's 2018 and 2019 plans to impose tariffs totaling $300 billion on China and other trading partners.
Mr. Trump has promised that if he is elected, he will impose more tariffs — not just on China, but on all imports by 10 percent. Economists say this will not only create severe unemployment in the United States, but will also add fuel to the fire of inflation.
1. Impact on economic growth, inflation, and the Federal Reserve
The new tariffs, which will continue through 2006, come at a time when U.S. economic growth is dynamic and consumer spending is strong, but the Federal Reserve continues to keep interest rates high in response to decades-long inflation.
Ryan Sweet, chief U.S. economist at Oxford Economics, said Biden's tariff plan may not bring changes to monetary policy.
In an article written on Monday amid reports that the United States would change its tariff policy, Sweet said: "The relationship between the new levy is basically a round-off error for inflation and GDP, and it has no impact on monetary policy." The Fed can't make a mountain out of a mole mound. As a result, tariffs do not provide an additional justification for maintaining high interest rates for longer. "
After learning Tuesday of the full scope of Biden's tariffs, Sweet told CNN that there were no major changes to which of his expectations.
Second, the negative impact on the domestic manufacturing industry in the United States
In 2002, when George W. When President George W. Bush imposed tariffs on imported steel and aluminum products, research showed that although the economy lost only $30 million, it led to higher prices in the U.S. steel consumer industry, and a large number of job losses for the steel industry as a whole, especially for small companies that did not have the ability to influence market prices.
Seven years later, when President Ma imposed tariffs on tires imported from China, his original intention was to save 1,200 jobs in the U.S. tire industry, but the Peterson Institute for International Economics found that the rise in tire prices cost the United States $1.1 billion.
Economists at the Federal Reserve Bank noted that Trump's tariffs in 2018 did not directly lead to job growth, but to higher net unemployment and higher consumer goods prices due to higher input spending and retaliatory tariffs.
Third, it brings higher costs to consumers
Sweet points out that tariffs often have more political significance than economic significance. "Most economists see tariffs as bad ideas because they prevent a country from exploiting the benefits of comparative advantage, disrupting the flow of goods and services, and leading to a misallocation of resources," he wrote. Tariffs often cost consumers and producers higher prices. ”
This is because tariffs increase expenses for U.S. distributors, retailers, and ultimately consumers when imported goods come to the shore.
The U.S. International Trade Commission said in a 2023 study that U.S. importers "bear almost the entire cost of Trump's tariffs."
To make matters worse, some businesses seem to be profiting from the trade war by raising prices even further.
Goldman Sachs found that tariffs prompted U.S. producers and exporters outside of China to the U.S. market to "take the opportunity to raise their prices."
The Federal Reserve Bank of New York found that the 2018 tariffs cost U.S. households an average of $419 due to higher tax burdens and reduced market efficiency. Researchers estimate that the tariffs that came into effect in 2019 will double that loss.
The Federal Reserve has been forced to keep interest rates high due to high inflation
Over time, the potential positive economic impact of tariffs has become less significant.
Economists at the National Institute for Economic Research wrote in a working note published in January 2024 that the purely economic effects of import tariffs, retaliatory tariffs and agricultural subsidies on U.S. jobs and commerce are "unhelpful at best, and potentially even harmful."
In the report, the researchers note that the trade war does appear to have played a political role in boosting Republican support for the Republican Party in the heartland and communities of the United States most affected by the tariffs.
"Residents of tariff-protected areas have become less likely to identify with Democrats and more likely to vote for President Trump," they wrote. Despite the economic costs they have also paid, voters seem to have responded positively to the tariffs' protection of local industries. "
Fourth, the impact on U.S. imports
The COVID-19 pandemic has disrupted supply chains, distorting the full picture of the impact of tariffs imposed in 2018-2019 on U.S. manufacturing and trade.
Economists at Wells Fargo wrote in an April report that U.S. importers initially tried to substitute Chinese goods, but once the pandemic hit and U.S. consumer demand grew, domestic inventory levels fell rapidly and imports from China picked up quickly.
But by the end of 2023, imports from China were down 3 percent from 2019 and imports from South Korea, Singapore, Taiwan and Vietnam were up 50 percent, Nick Selvey, an economist at Wells Fargo, told CNN in an interview.
"Some conclusive data shows that we're seeing stronger imports from countries other than China, and some of them may be Chinese companies moving their production to other countries that aren't affected by the Section 301 tariffs," Selvi said. ”
Pete Sander, principal analyst at Xeneta, a sea-air cargo analytics and logistics company, said recent air-sea cargo data further suggests that Chinese companies may be trying to circumvent U.S. tariffs through Mexico.
Container ship imports from China to Mexico surged 60% in January and 34% in the first quarter, according to Xeneta.
Sander told CNN in an interview: "That's a big number, it's unbelievable. "What used to be a small trade route is now one of the busiest in the world.
"It's clear that the destination of these imports is not just within Mexico," he said. ”
What Biden’s tariffs on Chinese imports may mean for American jobs, the economy and inflation. By Alicia Wallace, CNN, May 14, 2024.
Countries have long imposed tariffs as a means of protecting and shoring up domestic industries.
However, history and research have shown that the economic effects often fail to live up to the hype.
On Tuesday, the Biden administration announced the latest iteration of American import taxes: a wave of new and heightened tariffs on Chinese exports across a slew of industries deemed strategic to national security.
Economists expect that the newly announced $18 billion in tariffs likely will have a minimal near-term impact on GDP, inflation and monetary policy — some equating it to a mere “rounding error.” However, on a broader level, the picture could be more complex.
“The tariffs announced on China by the Biden administration foreshadow what is going to be a long, cold winter of economic conflict between the US and China,” economist Joe Brusuelas at RSM US told CNN.
The latest tariffs build upon former President Donald Trump’s sweeping $300 billion program in 2018 and 2019, which levied tariffs heavily against China and a variety of other trading partners and is still in effect.
Trump has made campaign trail promises for even steeper tariffs if he were elected — not just for China but an across-the-board 10% tariff on all imports, which economists have said would not only result in significant job losses in the US but also stoke inflation.
Economic growth, inflation and the Fed
The latest tariffs, which would roll out some time between now and 2026, come amid a solid job market, robust economic growth and strong consumer spending — but also a continuing battle against decades-high inflation that is keeping interest rates higher.
Biden’s tariff plan likely won’t move the needle for monetary policy, said Ryan Sweet, chief US economist at Oxford Economics.
“The additional tariffs are essentially a rounding error for inflation and GDP, carrying no implications for monetary policy,” Sweet wrote in a note issued Monday, when reports first indicated that changes to the US tariff policy were forthcoming. “The Fed will not make a mountain out of a mole hill, so the tariffs will not provide additional ammunition to justify keeping interest rates high for longer.”
On Tuesday, after learning the fuller scope of the Biden administration’s tariffs, Sweet told CNN those expectations shouldn’t change significantly.
Domestic manufacturing
In 2002, when President George W. Bush placed tariffs on imported steel and aluminum products, studies show that while it only cost the economy $30 million, it resulted in higher prices for American steel-consuming industries and led to a steep loss of jobs throughout the steel industry, especially among smaller firms that didn’t have the market power to influence prices.
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Seven years later, when President Barack Obama increased tariffs on tires imported from China, the initiative was credited with saving about 1,200 jobs in the US tire manufacturing industry, but came at a $1.1 billion cost to Americans in the form of higher prices, the Peterson Institute for International Economics found.
The 2018 tariffs imposed by Trump did not result in an immediate boost to manufacturing employment but instead led to a net loss of jobs and rising prices for consumers due to higher input costs and retaliatory tariffs, Federal Reserve economists noted in a 2019 paper.
Costs to consumers
Tariffs typically make more political sense than economic sense, Sweet noted.
“Most economists view tariffs as a bad idea because they prevent a country from reaping the benefits of specialization, disrupt the movement of goods and services, and lead to a misallocation of resources,” Sweet wrote. “Consumers and producers often pay higher prices when tariffs are implemented.”
That’s because tariffs tax imports when they come ashore, adding costs for US distributors, retailers and, ultimately, consumers.
The US International Trade Commission said in a 2023 study that US importers “bore nearly the full cost” of the Trump tariffs.
Worse, some businesses appeared to take advantage of the trade war by bumping up prices even higher.
Goldman Sachs found that tariffs allowed US producers and non-Chinese exporters to the US market to “opportunistically raise their prices as well.”
The New York Fed found that the 2018 tariffs cost US households $419 per year because of higher tax burdens and market efficiency losses. Researchers estimated that would double as the tariffs went into effect in 2019.
As more time has passed, the positive economic effects have become even less clear cut.
The net economic effect of the import tariffs, retaliatory tariffs and agricultural subsidies “was at best a wash, and it may have been mildly negative,” to US jobs and businesses, economists wrote in a National Bureau of Economic Research working paper published in January 2024.
The trade war did appear to have political benefits in strengthening support for the Republican party in the US heartland and communities most affected by the tariffs, researchers noted in the NBER working paper.
“Residents of tariff-protected locations became less likely to identify as Democrats and more likely to vote for President Trump,” they wrote. “Voters thus appear to have responded favorably to the extension of tariff protections to local industries despite their economic cost.”
The flow of imports
The Covid-19 pandemic’s discombobulating effects on supply chains distort the full picture of how the 2018-2019 tariffs affected US manufacturing and trade.
US importers had started to substitute away from Chinese goods, but once the pandemic struck and US consumer demand increased, domestic inventory levels drew down quickly and China imports ramped back up, Wells Fargo economists wrote in an April note.
However, by the end of 2023, imports from China were down 3% relative to 2019 while there was a 50% growth in imports from South Korea, Singapore, Taiwan and Vietnam, Nicole Cervi, an economist at Wells Fargo, told CNN in an interview.
“There’s definitely some data to suggest that we’ve seen stronger imports from countries outside of China, and some of it may be that Chinese businesses are perhaps relocating some of their operations to these other countries that are not being affected by the Section 301 tariffs,” Cervi said.
Recent ocean and air freight data gives further rise to suspicions that China may be trying to circumvent US tariffs via Mexico, said Peter Sand, chief analyst with Xeneta, an ocean and air freight analytics and logistics company.
Container shipping imports from China to Mexico rocketed higher by 60% in January and 34% for the first quarter, Xeneta data shows.
“That’s a lot,” Sand told CNN in an interview. “It’s staggering.”
What was once an immature trade lane is now one of the busiest in the world, he said.
“It’s obvious that imports to this extent are not only for domestic purposes in Mexico,” he said.