U.S. media lashes out at U.S. new tariffs on Chinese products-Xinhua

U.S. media lashes out at U.S. new tariffs on Chinese products

Source: Xinhua

Editor: huaxia

2024-05-16 14:45:30

BEIJING, May 16 (Xinhua) -- U.S. media CNN has criticized the Biden administration's latest tariff hikes on an array of Chinese products as "a bad idea."

In a Tuesday article titled "What Biden's tariffs on Chinese imports may mean for American jobs, the economy and inflation," CNN said history and research have shown that the economic effects of tariffs often fail to "live up to the hype."

"Economists expect that the newly announced 18 billion U.S. dollars in tariffs likely will have a minimal near-term impact on GDP, inflation and monetary policy ... However, on a broader level, the picture could be more complex," it said.

It listed similar actions of former U.S. presidents George W. Bush, Barack Obama and Donald Trump as examples. In 2002, when then President Bush placed tariffs on imported steel and aluminum products from China, it resulted in higher prices for American steel-consuming industries and led to a steep loss of jobs throughout the steel industry.

Seven years later, when then President Obama increased tariffs on tires imported from China, the initiative came at a cost of 1.1 billion dollars to Americans in the form of higher prices, the Peterson Institute for International Economics found.

"The 2018 tariffs imposed by Trump did not result in an immediate boost to manufacturing employment but instead led to a net loss of jobs and rising prices for consumers due to higher input costs and retaliatory tariffs," the article quoted U.S. Federal Reserve economists as saying.

"Tariffs typically make more political sense than economic sense," Ryan Sweet, chief U.S. economist at Oxford Economics, noted.

"Most economists view tariffs as a bad idea because they prevent a country from reaping the benefits of specialization, disrupt the movement of goods and services, and lead to a misallocation of resources," Sweet wrote.

"Consumers and producers often pay higher prices when tariffs are implemented," he said.

That's because tariffs tax imports when they come ashore, adding costs for U.S. distributors, retailers and, ultimately, consumers.

The U.S. International Trade Commission said in a 2023 study that U.S. importers "bore nearly the full cost" of the Trump tariffs.

Worse, some businesses appeared to take advantage of the trade war by bumping up prices even higher, according to the article.

"The New York Fed found that the 2018 tariffs cost U.S. households 419 dollars per year because of higher tax burdens and market efficiency losses."

The net economic effect of the import tariffs, retaliatory tariffs and agricultural subsidies "was at best a wash, and it may have been mildly negative" to U.S. jobs and businesses, the article said, quoting a U.S. National Bureau of Economic Research working paper published in January 2024.