Trump’s China Policy May Not Improve US Job Loss Situation
TL/DR –
The article discusses the economic implications of the U.S.’s trade relationship with China and potential strategies for reconfiguring global trade. It highlights that import tariffs on China may hurt the U.S. and suggests forming alliances with Southeast Asian countries as an alternative strategy. The article also suggests that the U.S. should encourage global cooperation by rejoining the Trans-Pacific Partnership (TPP) and imposing trade measures that balance bilateral trade with China and redirect commerce to Pacific economies.
Trump’s China Tariffs: A Need for Asian Alliances
Building trade barriers around America could distance Asia’s growing economies, potentially harming U.S. security and consumer interests. The proposal by former President Donald Trump could have severe impacts if bridges aren’t built with Southeast Asian allies.
Chinese imports have already cost the U.S. millions of manufacturing jobs. Additionally, China’s mercantilism threatens the Western prosperity by seizing leadership in sectors like electric vehicles and green-energy equipment.
Nearly 90% of publicly traded Chinese companies benefit from subsidies, which frustrates the World Trade Organization’s (WTO) Dispute Settlement processes. This led to blocked appointments of the Appellate Body under former President Barack Obama.
Both Trump and current President Joe Biden continued this policy, undermining the WTO’s dispute resolution mechanism and overall relevance.
China’s Aggressive Policies
China’s aggressive stance includes threats to Taiwan, territorial claims in the South China Sea, and intimidating nearby nations like Vietnam and the Philippines. In response, the Trump administration imposed tariffs on multiple Chinese products when initial trade issue discussions failed.
These tariffs were extended by Biden to include EVs, lithium-ion batteries, and solar panels, along with policies to bolster American manufacturing.
European Union Follows Suit
The European Union (EU) is also adopting similar measures. However, implementing tariffs and insular policies against China’s mercantilism plays into Beijing’s advantage.
Western governments must balance protection and subsidies while managing domestic interests. If not, it can raise costs and require additional subsidies, further complicating the U.S. federal budget situation.
Reimagining Global Trade
The U.S. could promote global cooperation by rejoining the Trans-Pacific Partnership (TPP). The ASEAN bloc of Pacific nations is gaining foreign investment, making it an economic force comparable to China, India, Japan, South Korea, the U.S.-Mexico-Canada Free Trade Area, and EU-U.K.
If tariffs are imposed universally, it could alienate these emerging economies and hamper U.S. efforts to create a collaborative security agreement in the Pacific. Instead, a comprehensive mechanism should balance U.S.-China trade while redirecting business to other Pacific economies.
Rejoining the TPP could encourage the EU to abandon its bilateral approach to the Pacific and seek membership, possibly inspiring India to join, and creating a WTO without China.
The China Decoupling Trend
The trend of decoupling from China is gaining momentum in both the U.S. and Europe. The beneficiaries and potential investment focus are companies that are restructuring supply chains to capitalize on growing markets in Southeast Asia, the future locus of global growth.
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