The Trade War Begins: U.S. and China Tariffs Take Effect
*By Alisha Haridasani*
It’s happening.
A fierce trade war between two of the world’s largest economies set off early Friday, after the U.S. officially implemented tariffs on $34 billion worth of Chinese goods and Beijing immediately responded in kind.
President Donald Trump warned on Thursday, before the tariffs went into effect, that the U.S. could end up taxing every single Chinese item imported if Beijing retaliates. That would be worth $500 billion.
China, however, didn’t blink and blamed the U.S. for launching “the biggest trade war in economic history so far.”
While U.S. markets didn’t seem to react to the news at the open, the impact of the economic tit-for-tat will likely sweep across corporate supply chains in both America and China, weighing down bottom lines and consumer wallets.
“It’s becoming conventional wisdom at this point that the benefits of corporate tax cuts is being offset by the uncertainty around the trade war,” said Axios reporter Erica Pandey.
“We can see impacts as small as a small price hike for consumers, or the businesses could choose to eat the costs and we could see losses of jobs.”
The Trump administration’s tariffs specifically target high-tech products in an attempt to punish China for intellectual property theft. That could have knock-on effect on [millennial consumers](https://cheddar.com/videos/how-the-trade-war-will-affect-millennials), said Pandey.
“Some of the goods on the chopping block include e-bikes, e-scooters, e-cigs, and everything ‘e,’ and smart home devices,” said Pandey. “So it’s the tech devices that are overwhelmingly used by young people that are not often discussed but that could go up as much as $100 per unit with these new tariffs.”
China’s tariffs target America’s agricultural industry, hitting soybeans, poultry, corn, wheat, rice, and beef, with the intention of crippling farmers’ support for Trump.
One slice of the agricultural industry is already feeling the pinch: [cheese producers](https://cheddar.com/videos/u-s-cheese-producers-in-crossfire-of-trade-war). American cheese makers in recent years have relied heavily on exports to Mexico and China, both countries that have now levied retaliatory taxes on the dairy product, said Wall Street Journal reporter Heather Haddon.
Before the tariffs kicked in, dairy exports had hit a record high in April, doubling from nearly a decade ago, according to Haddon's reporting.
With the new trade barriers in place, cheese makers are struggling to find a market for their products. "They can't just take this cheese that was made for Mexico and then just and sell it to folks in North Carolina or wherever," said Haddon.
"At the same time we've got record high cheese in storage right now. There's quite a lot of supply in the U.S. so it's also not like the supply can just go domestically."
Adding to the cheese makers problems are the perishable nature of their product, which would only compound their losses.
"Some of them are starting to contemplate shifting to cheeses that can be held for longer, that can be aged, that benefit from ageing, if this tariff situation continues."
Eli Yokley, Senior Reporter at Morning Consult, joins Cheddar News to discuss how Americans are prioritizing economic issues over the pandemic when it comes to voting.
President Biden's disapproval rating hit a new high in December according to a poll from CNBC and Change Research, as Americans expressed their disapproval over the current state of the economy. This comes just months after the president signed a historic infrastructure bill back in November that was promised to bring a surge of jobs, especially in the manufacturing sector.
Change Research Senior Pollster Nancy Zdunkewicz spoke to Cheddar News about just what is driving the President’s disapproval rating.
As the Omicron variant continues to sweep across the country. The US Supreme Court is expected to hear arguments at the end of this week on whether or not the Biden administration can force private companies to vaccinate or test millions of their employees. In addition, the National Nurses United has spearheaded legal action to protect nurses and health care workers, patients, and the public while on the job. President of the National Nurses Union, Zenei Cortez, joined Cheddar to discuss more.
Far too often, Americans are forced to navigate a tangled web of outdated government websites, offices way out of their reach, and hours of time 'on hold' to access the simple government services they depend on. A recent executive order, signed by President Biden, is intended to improve, streamline and modernize the 'customer' experience when accessing government services. Mina Hsiang, the administrator of the United States Digital Service, joins Cheddar News to discuss how the tech workforce is impacted by this executive order.
Today marks one year since the January 6 Attack on the United States Capitol. The Country watched as supporters of then-President Trump stormed what was assumed to be the most secure building in the country in an attempt to stop the certification of the 2020 Election. Several lawmakers, including the Vice President, could be seen ducking down as they feared for their lives. Democratic Michigan Representative Dan Kildee, joined Cheddar to discuss more.
Stocks closed lower on Friday as investors continue to worry over rate hikes. John Lynch, CIO of Comerica Wealth Management, joins Cheddar News' Closing Bell, where he says value is back in play with investors. Lynch also believes the market has overreacted to the latest Fed minutes, suggesting a bounce-back at some point.
Ben Armstrong, founder of Bitboy Crypto, joins Cheddar News to discuss Bitcoin's downward trend and what's next for crypto after protests in Kazakhstan cause crypto miners to shut down.
Washington, D.C. Attorney General Karl Racine joins Cheddar Politics to discuss his lawsuit against the extremist groups Proud Boys and Oath Keepers over their role in the January 6 attack on the U.S. Capitol.
Josh Pasek, a professor at the University of Michigan and expert on political communication and misinformation, joins Cheddar News to discuss how political radicalization happens and how America got to this point.
Kyle Kondik, managing editor at Sabato's Crystal Ball at the University of Virginia Center for Politics, joins Cheddar News to discuss what to expect at the 2022 midterm elections.
