As U.S. Readies Chinese Import Tax, Worries of Economic Impact Loom Large
*By Alisha Haridasani*
The first round of tariffs for American and Chinese goods goes into effect on Friday, officially plunging the two countries into a trade war that could end up undermining the U.S. economy.
The Trump administration is poised to impose taxes on $50 billion of Chinese imports in high-tech industries, such as robotics, aerospace, and industrial machinery, in an attempt to punish Beijing for intellectual property theft and to rebalance a trade deficit. The first phase of that will affect $34 billion worth of goods.
"The United States will be opening fire on the whole world and also opening fire on itself," said China's Commerce Ministry spokesperson on Thursday, reiterating that Beijing will fight back.
China has promised to immediately hit back with tariffs of “equal scale, equal intensity” on American soybeans, corn, wheat, rice, beef, and poultry.
President Trump announced the tariffs in June and since then the U.S. and China have been locked in a series of threats and negotiations that have rattled markets.
The back-and-forth has already forced companies to rethink their strategies. Chinese companies have started turning away from U.S. soybean suppliers and looking to other sources for agricultural products.
“Farmers in America’s heartland are already feeling the pain,” said Sara Hsu, economist and associate professor at SUNY-New Paltz. “Consumers can expect to feel the pain in the coming months.”
And enduring the pinch isn't going to pay off. Protectionism has historically proven to be destructive for the global economy and won’t achieve what the Trump administration is trying to accomplish, said Hsu.
The tariffs will hurt the American high-tech companies that Trump is trying to protect from intellectual property theft as it becomes increasingly difficult for those companies to do business in China, she said.
“Also, in terms of reducing the U.S.-China deficit, this is a point that I think the administration misunderstands,” she said. “A deficit is actually a good thing for the U.S. because we’re the world’s biggest economic power, and other countries are willing to hold our debt,” said Hsu. Reducing the deficit would signal that the global economy shouldn’t be investing in U.S. debt.
“We’re going to reduce our own power, it’s going to backfire on us.”
The trade spat with China is part of the president’s broader plan to renegotiate American trade deals with other countries. The U.S. has already levied tariffs on steel and aluminum imports from Canada, Mexico, and the EU, angering those allies and prompting them to retaliate.
Shots fired on that front have already claimed one American victim: Harley-Davidson. The motorcycle company announced last month it would move production out of the U.S. to get around the EU’s retaliatory tariffs.
For full interview, [click here](https://cheddar.com/videos/china-warns-u-s-on-trade).
Student loan debt continues to be a major concern for tens of millions of Americans who collectively owe about $1.7 trillion. Black college students often take on larger amounts of student debt in order to pay for a higher education. In turn, they are more likely to struggle post-graduation with repaying their debt, creating a racial wealth gap divide. Andre Perry, senior fellow at Brookings Institution joined All Hands to help break down the black student debt crisis.
After two NYPD officers were killed with an illegal gun, President Biden made a trip to New York City to speak on the issue of gun violence fed by the "iron pipeline" of illegal firearms that make their way from the South to the Big Apple. Kris Brown, the president of the gun violence prevention organization Brady United, joined Cheddar to discuss what this visit from the president could mean for the future of gun laws in America. "He's asked Congress to pass things like expanding the Brady background check system, but with the filibuster a barrier to so much action right now in the Congress, he's looking at solutions that involve funding at the federal level and really involve enforcement."
Following the surprising big beat on estimates for the January jobs report, William M. Rodgers III, vice president and director of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, joined Cheddar News to break down the data. “We ended 2021 with a strong crescendo to a recovery that had taken hold, and we started 2022 in good fashion." He also discussed the dueling pressures of wage growth and inflation.
Jessica Mason Pieklo, senior vice president and executive editor of the Rewired News Group and co-host of the podcast. "Boom! Lawyered," joins Cheddar Politics to discuss Justice Stephen Breyer's retirement, legacy and potential replacement on the Supreme Court.
The Biden administration delivered a temporary win for student loan borrowers this year by extending the moratorium on federal payments for a few more months. That moratorium is coming to an end on May 1st and borrowers will again have their monthly loan payment plopped in their lap.
Stephanie Vanderslice, a creative writing professor paying off debt through the Parent Plus program, and Mike Pierce, executive director of the Student Borrower Protection Center, join Cheddar Politics to discuss.
2022 was already going to be a big year for the Supreme Court. We have decisions on major issues like abortion and gun rights on the way. Then, Justice Stephen Breyer announced his retirement and that set up a major confirmation fight for later this year. Amy Howe, co-founder of SCOTUSblog, joins Cheddar Politics to discuss.
The Labor Department released a better-than-expected report of 467,000 jobs added in January. Heather Boushey, Council of Economic Advisers Member for President Biden, joined Cheddar to tout the administration's handling of the economy amid the pandemic and the upward revisions for the previous month. "It also shows that, because of the revisions, the economy was stronger over the past couple of months," she said. "I don't think that this can be said enough, but economic forecasting during an historic pandemic is extremely difficult." Boushey also addressed issues involving wage growth versus the rapid rise of inflation.
The Labor Department's January jobs report showed 467,000 jobs were added, compared to the 150,000 that were projected, a sign that employment is continuign to return to pre-pandemic levels. Lindsey Piegza, chief economist at investment bank Stifel, joined Cheddar to break down the report, noting the big gains but adding a note of caution. "Remember, even with this morning's stellar report, we're still millions below that level that we had reached prior to the onset of COVID-19," she said." Yes, we are recapturing jobs. We still have further ground that needs to be made before we can talk about reaching that previous peak." Piegza also discussed the role of the Federal Reserve going forward as the employment figures turn more positive.
