Tariffs due to the trade war with China have been escalating on goods we import from them, and it's affecting many firms and is ultimately hurting our economy. China is one of the biggest manufacturers for countless companies in the United States, and these huge tariffs are causing a great deal of firms to over pay for these products that are manufactured in China. Imports from China have also increased about 59% since 2008 and is only increasing. Since this is damaging our economy Trump has “demanded U.S. firms move production out of China.” Though many U.S. companies have already done this in the past, it’s important for major companies to take their production elsewhere. The issue is that many U.S. firms also rely on China as a prime source for their manufacturing, especially firms that are in the industrial and technology sectors. Major companies like Boeing and Apple have practically all their products manufactured in China, so it would be hard for them to leave anytime soon. China also makes 25% of all goods around the world, “in part because of the difficulty in finding a sufficient workforce on other countries’ factor floors.” Five years from now I wonder if China will still be a major exporter to the U.S. if this trade war continues.
https://www.cnbc.com/2019/09/01/trump-ordered-us-firms-to-ditch-china-but-many-already-have.html
I read somewhere that JPMorgan estimates that the tariffs could cost the average household and extra $1000 per year. It'll interesting to see how this will affect American companies who manufacture their products in China.
ReplyDeleteYour statement that the trade war with China is hurting our economy is quite broad. While it is true within certain industries that manufacturer and consumer prices have increased slightly, there hasn't been any notable price jumps. On the other hand, the argument could be made that this 'war' is giving American companies the excuse to diversify their business interests. This battle between the US and China will be much more beneficial in the long-term than the short-term. For many years China was benefiting substantially more than the U.S. in trading. With any form of change, there will be a significant “shock” to parts of the economy, however in the long run it will be more beneficial for the U.S.
ReplyDeleteI agree that the trade war may have beneficial affects in the long run, but I think the implementation was wrong. Tariffs on China would have been much more effective if they came from our allies as well and not just the U.S. A group effort to combat China would be tremendously more effective and less painful economically. I feel as though that ship has sailed though as we have alienated ourselves to the EU.
DeleteMany companies are also hesitant to leave China because it is such a significant investment to move production elsewhere. I read an article that stated companies are unwilling to move production out of China because they will be unable to move back in.
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