Expert: US hurting itself with trade tariffs

World
Europe

03:59

The world’s two largest economies are stumbling toward an all-out trade war. Nearly 40 percent of US imports from China are intermediate products used by American firms to become more competitive on the global stage. CGTN invited senior fellow at the China Association of International Trade, Li Yong, to share his ideas on the resulting damage to the US economy.

Is US shooting itself in the foot?

“The Trump administration’s intention to impose tariffs on Chinese products was to protect their own interests. Yet the economy is interconnected and cannot be isolated, especially nowadays US-China economic trade relations are interdependent,” Li said.

It won’t be easy for US companies to replace these intermediate products. Also, many of the targeted products are consumer goods such as televisions and seafood. The pain of additional tariffs is shared between consumers who pay higher prices and producing firms abroad who will suffer lower profit margins. It just leaves US consumers and makers no alternative but to pay more.

VCG Photo

Why the decision?

Li thinks there is a disconnection between the US business community and politicians. In fact, during the public hearing, many American business representatives voiced their concerns about the ongoing trade war.

Li stressed, “Consumers and businesses are paying a political price. The short-term impact has already been felt, and the long-term pain is underway.”

Some US companies have laid off workers. “A manufacturer from South Carolina is closing its plant due to the tariffs posed by China. They are not going to survive,” Li added.