A report released by Trade Partnership Worldwide shows that the U.S. economy is bound to lose 1 up to 2 million jobs, if in 2019 Trump imposes the 25 percent tariff on all Chinese exports. The research report was paid for by “Tariffs Hurt the Heartland”, a pro-free trade lobby group.
Although the Trump administration asserts that the 25% tariff aims to revive the U.S.manufacturing industry, the timing by which the tax plan surfaced gave way to a different interpretation. Other than it being perceived as a retaliatory tariff on levies imposed by other countries on U.S. exports, the singling out of U.S. products exported to China is perceived as a political retaliation against China.
Trade tension between U.S. and China started when in April 2018, Chinese smartphone maker ZTE was found to have been illegally-shipping American-made components to Iran. The discovery resulted to a 7-year trade ban between American software companies and ZTE. However, the finality of imposing the 25% tariff on all Chinese exports will also impact U.S. import. As it is, U.S. manufacturers also import materials and components from China, which they use in producing U.S. branded products.
Currently Chinese negotiations with the Trump administration are ongoing, using as leverage the US$250 billion Chinese exports to the U.S. At present, tariffs on products imported by American companies from China varies, pegged at either 10% or 20%. If by March 02, 2019 negotiators fail to reach an agreement, it is likely that China will also impose a 25% levy on all Chinese exports contracted by American manufacturers. Instead of revitalizing the U.S. manufacturing industry, increased costs of products procured from China, may only lead to the weakening of the industry.
British Brexit Proponent Sir James Dyson Voices His Views on the U.S.-China Trade Tension
Sir James Dyson, British inventor and founder of the company that produces revolutionary vacuum cleaners, bladeless fans and other electrical appurtenances, voiced his opinion about the ongoing U.S.-China trade tension. He reiterated his advocacy for a free economy, as a way of harnessing the best technology to use in manufacturing the best products that will benefit consumers.
Inasmuch as it is difficult to predict the resulting outcome of the trade negotiations between U.S. and China, his advice is not to wait on what changes will transpire. Sir James Dyson, cited as example his decision to build a UK-based electric car manufacturing company in Singapore, saying that there is no telling where trade relations head to in light of the continuing changes in governments and their policies. On that note, Sir James commented
“If one source becomes unavailable then we have another source to go to…. “That’s nothing to do with trade tariffs, that’s to do with supply and continuity of supply”.
In the U.S. American vacuum cleaner manufacturers like Oreck, sells machines that have been initially fabricated in China then fully assembled in the U.S.; or in some cases, import fully assembled products that will distributed under the Oreck brand.