Why won’t President Trump shut up about China? What is a tariff? Are we in a trade war? In the light of the upcoming election, these questions carry a lot of weight. In order to answer them on the most elementary level, I will put on two masks: one of an extremely leftist Democrat and one of a very conservative capitalist. You can decide who makes the better argument.
First of all, for those with a surface-level understanding, a tariff is essentially a tax on imported goods. The purpose of it is to encourage domestic production, which gives business to American firms. Sounds great right? However, this can increase the prices of goods domestic consumers buy. So, as a politician, how do you make sure that your producers are well-off, but not smothering your consumers? It’s really a balance, and there’s no perfect solution. However, it is no secret that the United States is in a trade dilemma with China (among others) that is hurting our producers. Tariffs seem to be Trump’s solution. In 2004, George Bush proposed Japanese steel tariffs to increase producer surplus among industrial states like Ohio and Pennsylvania (which gathered him a lot of support). The World Trade Organization (WTO) promised to punish America for this. However, once Bush received his votes and won the election, he canceled the tariff imposition. As a sneaky political strategy, we must not forget the negotiating power that import taxes also hold.
Now let me be a leftist:
We aren’t in a trade war … yet. If Trump keeps antagonizing China with his oversized confidence and taunting about their “abuse” of our producers, he will spark a conflict that we cannot win. Some nations have something called a comparative advantage, where it is cheaper to produce a certain good for one country than most others. China has this advantage in almost everything. Instead of accepting our true economic responsibility, we Americans get offended when anybody does anything better than us.
By imposing a tariff on China, Trump won’t help America. He’ll just make it easier for big businesses to abuse American buyers by forcing them to buy their goods. It’s not like American businesses don’t already bully American buyers. Ever heard of Walmart? Or Best Buy? Or any fast food chain on the planet (almost all are American). It’s absurd to act like America is the victim in the world economy. We’ve been a predatorial power for years, starting with southern cotton exports in the 1800s. This is just another classic case of Republicans taking the side of corporations to make America seem wealthy from the outside. “Made in America” means nothing.
What means something is our peaceful cooperation with nations like China. Even if we did decide to set a tariff, the World Trade Organization wouldn’t let it happen. They would impose sanctions on the United States and other nations would tariff American imports, crippling our producers. If we want to beat China, we should find our own comparative advantages and use them. This is much more effective than just asking China to pump the breaks. Trump’s tariffs won’t help anything, except for his ego.
Okay, now time to be conservative:
There is a trade war. A big one, and we’re losing it. China has been subsidizing their manufacturers for decades making it monumentally cheap for them to produce goods like plastic, steel, textiles, etc. Why does this matter? Because when your production cost drops beneath the world cost you can export merchandise at an ungodly low expense, forcing international producers to buy your products. This allows them to take serious advantage of their biggest trade partners, aka the United States. That’s right.
If we charge 100% of China’s tax on our imports is this a tariff? Or is it simply leveling out the competition? They’ve been abusing us for a long time. As Americans, we should look after only one kind of producer: the American producer. The fact that the WTO allows China to exploit us and drop the international price is an example of fantastic neglect and corruption. We’re not asking for a hegemonic advantage on the world, no. We’re asking for equal competition. American producers run our economy and therefore deserve priority from our government. All Trump is doing with these tariffs is putting the American economy first — something that our last three presidents haven’t done.
I say we take it to the WTO and propose that we be allowed to do the same thing to China as they do to us. This means taxing their imports and thus reducing the burden on our producers. This should continue until China steps up and stops cheating. Since our capitalist values prevent us from owning and entrapping our businesses (unlike China), we’re forced to compete in the world market in an honest manner. Instead of cheating like China does (or letting them bully us), we should continue to compete honestly and pressure China to do the same. Right now, we don’t charge nearly as much on Chinese imports as they do on American imports. This is the nature of the trade war., the war that we’re losing so terribly.
These are the two basic viewpoints on the issue. If you would like to develop a more in-depth understanding of it, I suggest that you perform some well rounded research. Read Fox News and CNN, then read something more moderate. Conquer both sides. We need to be informed on this dilemma because it’s economic — in other words, it actually matters. I gave you my two cents. Now create your own.