New Tariff Standard Or Negative Global Economic Impact Of Agency

Trump suggested that a 45% tariff be imposed on imports from China. What would be the impact on China? There are comments that the Chinese government's response may not be an obstacle to US companies' business in China, but a tax on US goods and services.

When China tires were levied, it acted quickly to impose punitive tariffs on us products.

As China has gradually become the key market for many US businesses, whether Apple, Starbucks or Boeing, any measures taken by the Chinese government to weaken their operational capabilities in China are bad news for them.

This view is worth paying attention to.

Donald Trump (Donald Trump) recommended a 45% tariff on imported products from China on the grounds that it helps to maintain job opportunities in the United States and promote business development in the United States.

What is more likely, however, is that this new tariff standard will bring about a series of mostly negative global economic impacts.

The scale of Sino US trade has reached 598 billion US dollars in 2015, which has brought great economic benefits to the Americans.

Whether it's sports shoes or smart phones, businesses will take many products to China to make them cheaper than in the US.

This is a welfare for American consumers, especially for consumers with less money on their rivals.

But economists are also increasingly aware of the negative impact of free trade.

Competition from emerging economies such as China with low labor costs has seriously affected the livelihoods of some American workers.

According to a research statistics, the United States lost at least 2 million jobs from 1999 to 2011 because of the influence of China's imports.

For many people, the solution proposed by Trump seems reasonable: limiting these imports, retaining job opportunities and supporting US businesses.

However, if 45% tariffs are imposed on Chinese goods, at least part of them will be passed on to higher prices.

On the body.

As a result, Americans will buy fewer Chinese goods and buy fewer other goods.

Shrinking sales of Chinese products will hurt American businesses and workers as a whole.

Products that are labeled "made in China" are not necessarily Chinese, because many products are assembled in China from parts of the United States and other countries.

Weak sales of so-called "Chinese products" will also reduce sales of us parts and components.

It is for this reason that a large sum of money spent on Chinese goods is finally imported into the pockets of Americans.

A study by the Federal Reserve Bank of San Francisco found that 55% of US consumers spent every dollar on "made in China" goods fell to sales, pportation and the Americans who promoted this product. "Reserve"

Restricting China's imports will hurt the interests of American shopkeepers and truck drivers.

In fact, the impact of rising commodity prices in China will also spread to major shopping centers in the United States.

For example, spending 20 dollars on children's clothing from China may lead to an American family buying a new baseball glove for their children or buying a birthday gift for their grandmother.

Increasing tariffs on China will affect sales of various products, including those produced in the United States.

Moreover, this tariff does not burden American consumers, nor does it seem to be of great benefit to job creation.

In response to the impact of Washington's decision to impose a 35% tariff on Chinese tire products in 2009, Pedersen Gary for International Economics (Peterson Institute for International) and Sean Laurie (Sean Lowry) conducted a study and found that American consumers had to spend more than $1 billion 100 million on the purchase of tyres, while at the same time the tariff only maintained no more than 1200 jobs.

In other words, we pay about $900 thousand for each job.

Charge high

It will also harm China's interests.

Restraining China's exports to the United States will add to the burden of an economy that has suffered the most serious slowdown in 25 years.

In the long run, the increased cost of doing business in China may prompt producers of basic consumer goods to consider pulling the production line out of China.

This process has begun.

With the improvement of China's economic level, the wages of labourers are also rising.

A recent survey by Japan External Trade Organization showed that

The per capita wages of employees reached $424 per month (about 2740 yuan), the highest in developing countries in Asia.

This has led to the shift of factories from China to other countries, or the diversification of their sourcing sources, in order to continue to maintain low production costs.

Foxconn is a Taiwan based enterprise that assembles iPhone for Apple Corp in mainland China.

The company announced last year that it will build up to 12 factories in India.

This means that your next smartphone or next pair of jeans may not be produced in Minneapolis, but in Mumbai.

The Chinese government's response may not be a barrier to the reduction of US companies' business in China, but rather a tariff on goods and services in the United States.

When China tires were levied, it acted quickly to impose punitive tariffs on us products.

As China has become a large number of American businesses? Whether Apple, Starbucks or Boeing's key market, any measures taken by the Chinese government to weaken their operational capabilities in China are bad news for them.

Low wage countries do bring competition pressure to American workers. The concern of Trump tariff proposal is real and justified.

However, this does not mean that this proposal can solve the problem, but it may bring more problems.

Although the increase in production costs in China may lead some enterprises to shift their production links back to the United States, they have a more reasonable choice to pfer production to other emerging countries with lower cost.

According to the survey data of the Japanese institutions, the average wages of the employees in India factories are 230 dollars a month, Vietnam is 185 dollars, and in Bangladesh it is 100 dollars.