Trump’s Trade Policy Threatens US Consumer as Much as China

President Trump claims his trade war with China will help the US while hurting China, but in fact his policy threatens American economic interests. To take one example, farmers who supported candidate Trump now find their soybean prices falling as China buys soybeans from Brazil and Argentina. Since Trump pulled the US out of the Trans-Pacific Partnership, our former Asian beef customers are now turning to Australia and New Zealand. The TPP is going into effect without the United States, meaning that Japan’s tariff on US beef still stands at 38.5 percent while beef tariffs for the 11 remaining members of the Trans-Pacific Partnership are being reduced to 27.5 percent.

In 2017 China purchased nearly $14 billion worth of American soybeans, but last July, in response to Mr. Trump’s tariffs on Chinese goods, China imposed a 25 percent tariff on US soybeans, leading to a 94 percent drop in Chinese purchases of American soybeans. To ease the pain of American farmers, Mr. Trump committed $12 billion in price supports for US farmers hit by plummeting sales in China. Thus, US taxpayers now pay a $12 billion penalty for Mr. Trump’s misguided tariffs on Chinese goods. Some of those payments to farmers are now delayed by the government shutdown, another Trump favor to his farmer base.

Yes, we have a large trade deficit with China, $375 billion in 2017. But we buy Chinese-made products because they are high quality and at the lowest price on the international market. China can do that because it has the world’s largest labor force that is also disciplined, hard-working, and relatively low paid. So American consumers have not suffered from any “exploitation” by China, quite the contrary.