Who will pay for China’s new tariffs on $75 Billion in US Goods? The US consumers, the US government or the Chinese consumers?
Does it matter who is paying the price in this trade war? It does because there is always a reason why goods are imported by a country.
Yes, in this trade war between the US and China, the US seems to be the bigger loser on paper. However, the US started this trade war and today US President Donald Trump tweeted why he started it.
“For many years China (and many other countries) has been taking advantage of the United States.
He cited trade and Intellectual Property Theft as the sectors where China took advantage of the US.
“Our country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight….,” he insists.
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight….— Donald J. Trump (@realDonaldTrump) August 23, 2019
China’s economic growth will depend more and more on its consumerism. Importing goods will play a great part in this consumerism because Chinese consumers are looking for better products, better quality.
US products are affordable for a segment of the population and the demand is there. They will pay higher prices for American goods.
CHINA TO LOSE IN THE LONG TERM?
There has been criticism against Trump who says China is paying for the tariffs imposed by the US on Chinese goods. In the end, it is the American consumers buying cheaper imported Chinese products who are paying for it.
In China, the game is different. American products are not cheap. Yet, for those who can afford to buy expensive products, what is 10% or 25% of tariff increases?
However, for those in the US who buys cheaper Chinese products, a hike of 10% to 25% make a huge difference. China is set to lose in the long term!
China is at war against the US and is imposing tit-for-tat tariffs on US goods. On Friday the Chinese announced tariff hikes on $75 billion of US products in retaliation for President Donald Trump’s latest planned increase.
This will deepen a conflict over trade and technology that threatens to tip a weakening global economy into recession.
China also will increase import duties on US-made autos and auto parts, the Finance Ministry says.