Is President Trump’s Tariff Package Against China Feasible?

tariff package

President Trump is preparing to impose a package of $60 billion in annual tariffs against Chinese products after his aides recommended a $30 billion package.  This has been a long-time threat that the president says will punish China for intellectual property theft and in turn, create more American jobs.  The tariff package could be applied to more than 100 products, which Trump argues were developed by using trade secrets the Chinese either stole from U.S. companies or forced them to hand over in exchange for access to its massive market.  But, is Trump’s tariff package feasible?

Nelson Dong, a senior partner at the international law firm Dorsey & Whitney law firm and co-head of its Asian Practice Group, shared his expertise after hearing that President Trump is preparing to impose a package of $60 billion in annual tariffs against China, which he plans to reveal by the end of the week. Dong has also been the Director of the National Committee on U.S., China Relations, and the director of Washington State China Relations Council, and was a member of the President Obama’s Export Council Subcommittee on Export Administration. Of the news on, he notes:

 As in Newtonian physics, for each action through major tariff measures, there can be an ‘equal and opposite’ reaction, not only in counter tariffs but also in the altered purchasing patterns of major enterprises in the affected nations, particular by state-owned or highly regulated enterprises in those nations, such as major airlines that buy ‘big ticket’ U.S.-made planes and their equipment and related services.  Generally speaking, if industry A in the U.S. economy might feel some momentary relief from foreign competition through one set of tariffs, then industry B in the U.S. economy may face higher priced imported inputs that it must use to make exported goods to sell into a highly competitive world market and thus be adversely affected, either because those higher input costs due to the higher U.S. tariffs hobble their price positions, because other national governments place pressures upon purchasing decisions to steer away from U.S.-made products in retaliation, or both.

Once a round of such tariffs and counter-measures are started, it can become very unclear when such tit-for-tat actions will stop, and then global commerce can suffer greatly, leading to more net job losses and more lost national revenues from exports than can be helped in the ostensibly ‘protected’ industries.  That is the essence of the fear of a wide-spread ‘trade war’ due to such tariffs.

China has long prioritized acquiring foreign technology, including through cyber-theft and economic espionage. Reportedly, a blue-ribbon commission on intellectual property concluded in 2017 that trade secret theft, primarily from China, has cost the U.S. economy $225 billion to $600 billion annually. The goal of Trump’s new trade measures is to convince Beijing to stop strong-arming U.S. companies into surrendering technical secrets in return for market access.  Is the proposed tariff package against China, feasible?tariff package

Trump is adamant about the proposed tariff package due to criticism of U.S. and China relations being a focal point of his presidential campaign.  Although a host of U. S. businesses agree with the censure, they do not support the current strategy of Trump’s administration as it relates to China.  However, if implemented, the tariff package would be the broadest set of punitive economic actions imposed by a modern U.S. president and could result in heavy retaliation, tattering the trade partnership between two of the world’s largest economies.

President Trump plans to slam China with a $60 billion annual tariff package.  As a candidate, he vowed to reduce the trade deficit, stop the unfair trade in aluminum and steel, reverse the tide of lost jobs resulting from trade, and end China’s cheating.  Many are questioning if Trump’s proposed tariff package against China is feasible.

By Cherese Jackson (Virginia)

Sources:

TRIB:  Trump prepared to hit China with $60 billion in annual tariffs
Washington Post:  Can Trump’s tariffs keep China from becoming the global technology leader?
Dorsey & Whitney Law Firm:  Nelson Dong

Image Credits:

Top / Featured Image Courtesy of Michael Vadon’s Flickr Page – Creative Commons License
Inline Image by Michel Temer Courtesy of Global Panorama’s Flickr Page – Creative Commons License

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