It is reported that former U.S. President Donald Trump is considering classifying China as a hostile country and imposing a 60% tariff on Chinese products if he returns to power in the November presidential election. They say they are preparing for a trade war with China by imposing stronger punitive tariffs than during Trump’s first term. The first phase of the US-China trade agreement in 2019 was concluded with China expanding its imports of US products. This time, it is interpreted as a plan to completely overhaul the international economic system that leads to the United States’ chronic trade deficit using tariffs as a weapon.
The Washington Post (WP) reported on the 28th (local time), citing multiple former President Trump officials, that former President Trump had recently discussed with his staff a plan to impose a 60% tariff on all Chinese imports. Former President Trump applied Section 301 of the Trade Act in 2018 and 2019 and imposed a high tariff of 25% on thousands of Chinese products. However, during his second term in office, he plans to impose a higher tax rate on all Chinese products.
During the first U.S.-China trade war, former President Trump imposed tariffs on China, citing Article 301 of the Trade Act, which allows retaliation against countries that discriminate against the U.S. or do not comply with trade agreements. If they come back to power this time, they plan to impose high tariffs on China by abolishing the Most Favored Nation (MFN) treatment. In the trade pledge released last year, former President Trump said, “We will strip China of most-favored-nation treatment and establish a four-year plan to stop importing essential goods, including steel and medicine, from China.”
Abolishing most-favored-nation treatment in trade deals would allow the United States to impose higher tariffs on China without being bound by the World Trade Organization (WTO) principle of ensuring equal trade terms for all members. Currently, the United States is applying ‘Column II’ tariffs with an average tariff rate of 40% to hostile countries such as North Korea and Cuba, rather than normal trade relations (NTR).
In addition, the tariff rate on Chinese products will be raised to 60% by adding a ‘universal baseline tariff’ that will impose an additional 10 percentage points on top of the current tariff on all foreign products. This means that they are discussing a plan to separate the US-China economic relationship, which was once so intertwined as ‘China+America’, that in effect classifies China as an enemy country.
Former President Trump’s consideration of imposing tariffs of up to 60% on China is based on the judgment that the trade structure between the United States and China is fundamentally unfair. Former U.S. Trade Representative (USTR) Robert Lighthizer, who is currently leading former President Trump’s trade pledges with China, said in an article in the Wall Street Journal (WSJ) on the 15th, “The huge trade surplus of some countries and the deficit of the United States are ( “It is proof that there is a huge distortion in the international trade system.”
However, it is pointed out that such a plan could lead to a domino effect of ‘retaliatory tariffs’ in each country, leading to global economic chaos such as rising prices and a reduction in trade. According to GTA (Global Trade Alert), a private trade research institute, when the United States imposed tariffs on China or the European Union (EU) during Trump’s first term, China and the EU also had an 80% chance of imposing retaliatory tariffs within two years. .
Former President Trump’s side argues that decoupling with China will help revive U.S. manufacturing and create jobs, as prices were relatively stable despite the imposition of tariffs on China during Trump’s first term. Regarding this, WSJ pointed out, “During Trump’s first term, tax cuts had the effect of revitalizing the economy, but it is difficult to carry out a major tax reform during Trump’s second term,” and “Trump’s tariffs will cause unprecedented chaos in the global economy.”
Washington =
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.