America’s Trade War with China: Is It Too Late to Turn This Ship Around?

Photo by Jens Rademacher on Unsplash

America is now in it’s second year of being engaged in a trade war with China. Since then, President Donald Trump has announced tariffs on hundreds of billions dollars worth of good imported from China, and China has likewise responded with significant tariffs as well. The average cost of the tariffs per U.S. household has risen to an~$800 per year as a result. The agricultural sector of the U.S. economy has been hit and is at decades low income. The U.S. economy has had to adjust in areas such as the steel and aluminum markets by creating new factories and increase the price of steel and aluminum goods. That being said, warning bells are going off on the U.S. economy.

In the last couple of weeks, investor trends show that lately people are favoring safer government bonds to investing in the market. There have also been recession signs in other markets as well. Germany just reported a contraction of -.01%, Britain also just reported a contracting economy with the latest quarter reporting in at -.02%. Then most importantly to this article is China. China’s economic growth has dropped to decades low of +6.2%. Now this could be because of multiple different factors, but the trade war has been a significant factor in this slowing of China’s economic growth. China is also facing significant political instability in one of it’s most economical vital regions, Hong Kong.

So what does all this information mean? The data is showing that significant global economies are slowing down. Is this because of Trump’s rapid fire tariffs all over the world? I’m sure that those are playing a significant role in the slowing of global economic growth, but there are other factors that are having their effects as well. Those would need to be explained in another article at another date, the question here is if the U.S. can turn around on the trade war with China. I am going to utilize the metaphor of a ship heading into a storm.

Photo by Anton Kraev on Unsplash

The good ole’ USS America is heading into this trade war hurricane. She is trying to get to reach some important economic and diplomatic goals. The U.S. wants to secure greater access to Chinese markets and to strengthen intellectual property rights and laws (most important and direly needed goal for the U.S.). USS America is now in the hurricane starting to feel the worst of it, in this case that is rising consumer costs, slowing economic growth, etc. Now half the crew of the ship is wanting to turn around to prevent further danger to ship, but is it possible now?

Sure America could turn around on the trade war if Trump loses in 2020 (which this writer surely hopes he doesn’t win reelection), but this will place the U.S. in a terrible position for future negotiations. Pulling out of the trade war would almost be as bad as Trump pulling out of the Paris Climate Accord in terms of reputation. The U.S. wouldn’t have accomplished anything of it goals which the intellectual property rights is a significant issue that the U.S. cannot afford to lose in the long run. If the ship were to turn around now, it could potentially cause far greater damage in the long run then pushing through the storm now.

Now there are ways that Trump or the next president could help the USS America’s position. Firstly, end the other trade wars. When the U.S. is sailing into the greatest hurricane that the poor ship is likely to face in a while, why aim for every other rough surf? Why create trade wars and place on tariffs over fairly insignificant issues such as dairy trade with Canada? German and Japanese car makers? Placing tariffs on wine and other goods from Europe because of sovereign taxes that they are placing on market activity in their nations? These insignificant tariffs and trade wars are silly and just create more hostility towards the U.S. market then there needs to be. Therefore the U.S. should pull out of those trade wars, or ease tariffs on allies and other markets immediately. The primary goal right now for the U.S. should be to win this trade war since we seem to be stuck in it now.

If anything, this trade war should have happened under any of the three previous administrations while China was far more dependent on the U.S. for trade. That would’ve created a far more significant impact then rather then now and then the U.S. wouldn’t be running into the position it is now. Unfortunately that wasn’t the case. Since the TPP was the next best attempt at fixing it, that failed when Trump pulled the U.S. out of it early in 2016. So here is the U.S. now, we are in the hurricane now and unfortunately I don’t see a way to turn around the boat now.

Graduate Student in International Security, Political Junky, History Buff, Star Wars Fan.

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