On Monday, Sept. 17, 2018, President Donald J. Trump announced to the general public that he is implementing additional tariffs on Chinese goods. President Trump believes, according to BBC News, that China is still partaking in “unfair trade practices,” which led him to institute a new tariff on Chinese imported goods.
This is not the first tariff that was implemented between the United States and China. Stated by Greentechmedia.com (GTM), the United States implemented a “10 percent tariff on $200 billion worth of Chinese goods,” June 19. Around July 11, China fired back by adding a “62 percent tariffs on pork,” according to Ashley Williams from Global Meat News. In an article written by John Fritze from USA Today, there is even a tariff on aluminum and steel in “Canada, Mexico, and the European Union,” back in May.
With the new tariff underway to China, the estimated amount, according to the New York Times, is around “$200 billion.” The general items that will be affected include imported Chinese goods. With the new implementation of tariffs and the continuation of a tariff war between the United States and China, the question remains as to who will be affected by the tariff and how will this impact the economy?
Dr. Legg, professor of American history at West Chester University of Pennsylvania, states that under short term tariffs, “prices will go up” in regard to consumer products. This could mean that consumers such as college students will have to pay more for grocery items. As the new tariff goes on long term, Dr. Legg believes that there is “likely be a downturn” in the economy, but not a crash to be seen in recent history.
To view Trump’s policies in a historical perspective, Dr. Legg implies that “Trump and advisors are envisioning trade in the construct of old mercantilist view of the world.” The most damaging tariff that is equivalent to Trump’s tariff in American History is the Harvey-Smoot tariff of 1930, which according to Dr. Legg, “deepened the financial crisis and the great depression.”
In adding fuel to the fire, the United States’ new tariff against China is affecting the general structure of trade and diplomacy in America. “We are seeking an alliance with China over North Korea, but are hurting them in trade,” says Dr. Legg. As a consequence, “China made overtures to other countries, such as soybeans from Brazil than from the US.” This is a definite setback and reversal to America’s trade policies on being ‘global.’
Based from a transcript from National Public Radio (NPR), Douglas Holtz-Eaken, an economist, believes that Trump chose a good opponent on trade, but through competition “it carries great risk.” This risk that Douglas perceived is further retaliation on further tariffs. According to BBC News, there was a recent vow by China that it will “retaliate against any further US tariffs,” which did happen a day after Trump’s announcement and even long before.
For the general moment, more tariffs are likely to come, pending the President’s vow to America on keeping “America First” on trade. To conclude, a quote from Dr. Legg that fittingly summarizes this situation is, “short term gain for long term pain.”
Nicholas Bartelmo is a third-year student majoring in History. NB790429@wcupa.edu.