Failed US President Donald Trump signalled that if re-elected, he will cut tariffs on imported Chinese goods by up to 80%. He made the announcement during a campaign rally on Thursday, signaling that this will cut inflation and reduce prices for US consumers.
Trump said he still believes China must be held accountable on trade but also added that eliminating the current tariffs would relieve pressure on American small businesses and families. “We put those tariffs in place to correct an unjust system,” Trump stated. “Now it’s time to dial them back so they help our people.”
This comment is a deviation from Trump’s earlier stance during his presidency, when he imposed stiff tariffs on Chinese goods worth billions of dollars. That move led to a trade war spanning decades between Washington and Beijing, increasing the cost on most goods such as electronics, clothing, and machinery.
Trump increased tariffs on Chinese products to a peak of 25% in 2018 and 2019, stating it would bring back American jobs and stop what he termed as theft of American intellectual property. China imposed tariffs on U.S. exports like soybeans and automobiles in response.
Whereas the trade war had brought tense relations, it also seated both countries at the negotiating table, resulting in the Phase One trade deal in early 2020. Nevertheless, most of the underlying trade issues remained unsettled, specifically in technology and manufacturing.
Once again, Trump argues a new approach is required. “The objective is no longer punishment,” he said. “It’s balance. We can be strong without being stuck.”
The potential reductions in planned tariffs would bring prices on consumer items down and ease supply chain bottlenecks, analysts report. Critics, however, warn that excessive give to China will weaken U.S. negotiating power in subsequent rounds of negotiations.
Trump’s remark comes as he continues to try to build traction for another run at the White House. Further details about his economic agenda will be unveiled by his team over the next few weeks.
Meanwhile, China itself hasn’t made an official response to the comment. Still, earlier comments by Chinese commerce officials suggest they would welcome tariffs that have affected their export numbers over recent years to be rolled back.
As the global economy continues to bounce back from the brunt of COVID-19 and inflation, the majority of experts have stated that whether or not the U.S. sustains its relationship with China would be what decides stability in the long run.
