The US Continues to Be Most Affected by Trump's Latest Tariff Policies
A 60 percent tariff on Chinese imports might ignite a trade war, which could have a significant impact on U.S. industries that depend on Chinese goods. This situation could result in economic disruptions, inflation, and possibly even social unrest.
TroibNews 
**Editor's Note**: Jin Jun is an associate professor at the School of Management, Zhejiang University. The following article represents the author's views and does not necessarily reflect those of CN. It has been translated from Chinese and edited for brevity and clarity.
A thorough analysis that incorporates China's customs export data, the percentage of Chinese exports within important U.S. industries, and a recent quantitative study by the Peterson Institute for International Economics indicates that implementing a 60 percent tariff on imports from China, as proposed by the new Trump administration, would have a significant negative impact on the U.S. economy. Such a substantial tariff increase would ensnare both nations in a trade war reliant on tariffs, effectively halting bilateral trade. A cessation of China-U.S. trade would lead to three major detrimental effects on U.S. industrial production and the overall economy, with long-lasting consequences.
Firstly, according to the Peterson Institute's study, the U.S. agriculture, forestry, and fisheries sectors would experience the most critical and enduring setbacks.
Secondly, almost 60 percent of Chinese exports to the U.S. comprise intermediate goods rather than finished consumer items. U.S. industries, including automobile, machinery, pharmaceuticals, and electronics, depend heavily on raw materials, intermediate goods, and components sourced from China. Consequently, production in these sectors could slow down or even cease, leading to significant disruptions in the supply of these products and services. For instance, the U.S. relies on China for over 75 percent of vitamins B6, B12, B1, and C, and nearly 70 percent of vitamin E. Additionally, China is a crucial supplier of raw materials for antibiotics and antipyretic analgesics. If U.S. pharmaceutical companies are unable to import these vitamins, their production of related products would face serious challenges. Likewise, should China stop exporting auto parts to the U.S., finding suitable replacements for about 15 percent of the essential parts needed for production and maintenance would be difficult in the short term. Similar shortages would arise for electronic components, rubber, steel, and aluminum products. The consequent scarcities and price increases for these raw materials and components would disrupt business production and the regular operations of the relevant service sectors, resulting in factory closures and job losses.
Third, the lack of affordable, high-quality products made in China—such as fabrics, clothing, household goods, and furniture—would affect their availability in the U.S. While American manufacturers could potentially increase output in countries like Vietnam, Bangladesh, and India, the notable rise in transshipment trade from China to the U.S. via these countries in recent years illustrates that they cannot match the status and role of Chinese enterprises. As a result, the U.S. would likely confront increased inflation, diminishing Americans' access to high-quality goods at low prices. Transitioning to a more frugal lifestyle presents greater challenges than moving towards a more lavish one. A decline in the quality of life could lead to social conflicts and unrest within the U.S.
With the progress of China's Belt and Road Initiative and the development of the Global South, China is set to expand into these markets and boost exports, compensating for reduced shipments to the U.S. Furthermore, the U.S.'s blanket imposition of 10 percent tariffs on global partners would curtail its trade, adversely affecting its domestic economy. This transition could create new opportunities for China's trade expansion, alleviating the impacts of Trump's new tariffs on the country.
Alejandro Jose Martinez for TROIB News
A thorough analysis that incorporates China's customs export data, the percentage of Chinese exports within important U.S. industries, and a recent quantitative study by the Peterson Institute for International Economics indicates that implementing a 60 percent tariff on imports from China, as proposed by the new Trump administration, would have a significant negative impact on the U.S. economy. Such a substantial tariff increase would ensnare both nations in a trade war reliant on tariffs, effectively halting bilateral trade. A cessation of China-U.S. trade would lead to three major detrimental effects on U.S. industrial production and the overall economy, with long-lasting consequences.
Firstly, according to the Peterson Institute's study, the U.S. agriculture, forestry, and fisheries sectors would experience the most critical and enduring setbacks.
Secondly, almost 60 percent of Chinese exports to the U.S. comprise intermediate goods rather than finished consumer items. U.S. industries, including automobile, machinery, pharmaceuticals, and electronics, depend heavily on raw materials, intermediate goods, and components sourced from China. Consequently, production in these sectors could slow down or even cease, leading to significant disruptions in the supply of these products and services. For instance, the U.S. relies on China for over 75 percent of vitamins B6, B12, B1, and C, and nearly 70 percent of vitamin E. Additionally, China is a crucial supplier of raw materials for antibiotics and antipyretic analgesics. If U.S. pharmaceutical companies are unable to import these vitamins, their production of related products would face serious challenges. Likewise, should China stop exporting auto parts to the U.S., finding suitable replacements for about 15 percent of the essential parts needed for production and maintenance would be difficult in the short term. Similar shortages would arise for electronic components, rubber, steel, and aluminum products. The consequent scarcities and price increases for these raw materials and components would disrupt business production and the regular operations of the relevant service sectors, resulting in factory closures and job losses.
Third, the lack of affordable, high-quality products made in China—such as fabrics, clothing, household goods, and furniture—would affect their availability in the U.S. While American manufacturers could potentially increase output in countries like Vietnam, Bangladesh, and India, the notable rise in transshipment trade from China to the U.S. via these countries in recent years illustrates that they cannot match the status and role of Chinese enterprises. As a result, the U.S. would likely confront increased inflation, diminishing Americans' access to high-quality goods at low prices. Transitioning to a more frugal lifestyle presents greater challenges than moving towards a more lavish one. A decline in the quality of life could lead to social conflicts and unrest within the U.S.
With the progress of China's Belt and Road Initiative and the development of the Global South, China is set to expand into these markets and boost exports, compensating for reduced shipments to the U.S. Furthermore, the U.S.'s blanket imposition of 10 percent tariffs on global partners would curtail its trade, adversely affecting its domestic economy. This transition could create new opportunities for China's trade expansion, alleviating the impacts of Trump's new tariffs on the country.
Alejandro Jose Martinez for TROIB News
