Economic Arguments for and against US Tariffs on Chinese Goods

This essay discusses the economic arguments for and against the US's recent imposition of tariffs on Chinese goods. It explores the impact on domestic industries, consumers, and international trade.

Assessment Task 2-Essay 1
ASSESSMENT TASK-2
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Assessment Task 2-Essay 2
Discuss the economic arguments both for and against the US’s recent imposition of tariffs on
Chinese goods.
Introduction
Tariffs are the most common and important ways of trade restriction. They serve as trade
barriers. These are the taxes imposed on both imports and exports (Krueger 2012, p.113). The
amount of money accrued from tariffs is termed as a customs duty or simply a duty. They are
utilized by a government to boost the generation of revenue and protect the home or rather the
domestic industries from the outside country competition. Tariffs are termed as the best historical
methods of trade restrictions contrary to other methods of restrictions.
We have different types of tariffs namely; an import tariff, an export tariff, an ad valorem tariff, a
specific tariff and a compound tariff (Cole, and Davies 2011, p. 480). An import tariff is a tax or
the obligation levied on the imports and it is the most common between nations. The export tariff
is basically the tax levied on exported goods which is prohibited by the United States
Constitution, however it is practiced in growing nations for the generation of the government
revenue. For Ad valorem tariff there is a constant percentage on the price of the traded
commodities or goods. Specific tariff a constant sum according to the physical appearance per
unit of the traded commodity is applied. The compound tariff is composed of both the terms of
the specific tariff and of an ad valorem tariff.
This kind of tariff imposition on Chinese goods by U.S government is an ad valorem tariff which
levies duty on all the commodities traded according to the United States Trade Representatives
(USTR) publications (Hughes, and Meckling 2017, p. 256). The USTR’s publications were in 3
Tranches which were named Annex A; Tranche 1 imposed 25% levy which was about $34
billion of imports from China effective July 2018. Trance 3; imposed an additional 25% on the

Assessment Task 2-Essay 3
second list of import levies $200 billion of all the imports from China which was effective
September 2018. Annex B listing was set to be published come January 2019by additionally
increasing 25% on the commodities traded and become effective March 2019.
Arguments for the US’s recent imposition of tariffs on Chinese goods
One reason of tariffs imposition on Chinese goods by the US government is to protect the home
manufacturers from "dumping" by means of overseas corporations or governments. Dumping
endangers the financial viability of the US as the importing country. This occurs whilst a foreign
company expenses a charge in the home marketplace which is below its personal price or
beneath the fee for which it sells the object in its personal domestic marketplace. This was
brought by the action of China failing to comply with President Donald Trump's request of fair
prices of their commodities hence the tariff imposition protected that (Posen 2018, p.28).
Secondly, these tariffs were all aimed to put pressure to China to change the habit or the long
known trade practices which were undermining and hurting the America corporations for a long
while when the management believed that they had a bonus within the trade dispute and this has
made the United States assess an economic boom which includes the low unemployment rate
which had been a problem since 2000.
The imposition of these tariffs was also aimed at protection of the home industries also known as
infant industries from the foreign completion from the fast-growing industries from China
(Draper 2017, p.61). Many development guidelines specialists and businesses-specific attorneys
see it as essential to put into effect import charge lists to defend toddler domestic industries from
foreign opposition. This toddler industry technique has a negative track file. There are many
possible causes for this, a few monetary and a few political. This argument does now not expand
to all forms of manufacturers. Industries requiring excessive monetary capital have the maximum

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apparent need for kingdom safety from overseas competition. This is due to the fact
thatproduction and technological manufacturing is critical to constructing a long-time period
economic boom, yet setting up these types of firms is each unstable and time-consuming.
The other reason for the imposition was to protect the aging and the inefficient domestic or home
industries and manufacturers from foreign competition. They believe by protectionists is that
domestic corporations might be helpless in opposition to those viciously efficient foreigners, so
we should have alternate limitations to stop that stress (Hemphill, Thomas, and George 2013, p.
193). There is no doubt that opposition from viciously efficient competitors which drives up
productiveness and hence will increase living standards. When domestic productiveness is low,
or lower than overseas, this is precisely the purpose now not to put up protecting barriers. It's
most effective underneath out of doors stresses that our personal producers to cope with this kind
of competition. But when it overtakes the home production then home firms die from the
competition and hence foreigners benefit more than the ideal individuals.
Economic arguments against the US’s recent imposition of tariffs on Chinese goods
Burdening of the consumers whereby the most critical objection to safety comes from the clients.
The burden of defensive or these tariffs imposing duties does not fall at the overseas producers
that are China as it is concerned (Czinkota, and Ronkainen 2013, p.678). This burden is on the
home client due to the fact he has to pay a higher charge than earlier than because of the
imposition of import levies. It is said that it does no longer appearance truthful that a bad patron
must be penalized to complement the already rich producer. Thus inequalities of wealth
distribution are similarly aggravated. For instance, here are a few great goods which can come to
be greater steeply-priced for all the United States consumers and this is because of the price
elevation on certain things like; televisions, residence homes, and their renovations, washing

Assessment Task 2-Essay 5
machinery, solar panels, beer, cars, electronics, clothing, and cosmetics. Right now a few
industries in America have already published price lists and want to force them to raise costs
which include the Apple products, general motors, and Coca-Cola Company.
The protectionism to reduce domestic labor and zip the economic barrier of the nation in the
United States might lead to the substitution of imports with domestic manufacturing. These are
beggar-thy-neighbor arguments protection policies because they come at the price of different
countries. China will retaliate; all countries will lose ultimately. Mainly China and main
economic experts’ desire that trade warfare shown would stop. This political device used by
America is pretty effective with assessments and balancing, however, with a president who
frequently quickly based on his very own ideas concerning complicated problems, nearly
something is viable.
This competition protection economically is not going to be good because; the significance of the
trade war between the United States and China is affected by using different gamers (McNally
2012, p.741).The Apple company iPhone income in China is facing competition from domestic
manufacturers which leaves Samsung extra happy and this brings a big problem China can’t
address. Chinese also might shift its trillions in destiny aircraft purchases to Airbus this is
because of the upcoming European company in China for finishing dual-aisle jets. On the other
hand, vehicles such as BMW, Lexus, Ford, and Mercedes are bound to be made in China soon.
There is also the hazard of corruption. It may be very widely known that in America the
legislators were once supplied bribes by industrialists (Alschuler 2015, p.463). The object turned
into that no legislative degree can be followed which might adversely affect them, and rules
which suits them may be surpassed. Inefficient worries perpetuated. The elimination of overseas
opposition perpetuates vulnerable and inefficient worries. If competition were unfastened, the

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simplest sound and health concerns will remain inside the discipline. Although it may inflict
some harm on a few individual manufacturers, yet weeding out of unhealthy issues is considered
to be correct for the society as a whole.
China has decided to anticipate the U.S. to make the first move (Goldstein, 2013 p.49). A change
battle could be tricky for the location, and more a nation like S.E Asia will also be affected as the
main exchange partner to the U.S. and to China. This might not adversely affect China
specifically due to the fact the U.S. needs it more than the reverse.
Conclusion
In conclusion, it is clear that the imposition of the tariffs on Chinese goods by the US is going to
impact both the nations positively and negatively. Economically, the US might gain a clean
growth curve which might not be steady as many economists view it (Barnett, and Morse 2013,
p.566-574). For China, it will have a negative and a positive impact on the growth curve because
it might be back to equilibrium for some time before the economic boom. Politically, it will
affect the relation of the two countries because the rulers will be aiming at levying the
neighborhood’s commodities as a payback for what is being done to their country. Socially, the
normal country or home consumers will face a hard time especially in America where consumer
goods have already shown price rise and other commodities due to the imposition of the tariffs
(Browne, and Cronin 2010, p.331).

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References
Alschuler, A.W., 2015. Criminal Corruption: Why Broad Definitions of Bribery Make Things
Worse. Fordham L. Rev., 84, p.463.
Barnett, H.J. and Morse, C., 2013. Scarcity and growth: The economics of natural resource
availability. (pp.566-574). RFF Press.
Browne, F. and Cronin, D., 2010. Commodity prices, money, and inflation. Journal of
Economics and Business, 62(4), pp.331-345.
Cole, M.T. and Davies, R.B., 2011. Strategic tariffs, tariff jumping, and heterogeneous
firms. European Economic Review, 55(4), pp.480-496.
Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. (pp. 678-680). Cengage
Learning.
Draper, T., 2017. American business and public policy: The politics of foreign trade. (pp.61-89).
Routledge.
Goldstein, A., 2013. First things first: The pressing danger of crisis instability in US-China
relations. International Security, 37(4), pp.49-89.
Hemphill, Thomas A., and George O. White III. "China's national champions: The evolution of
national industrial policy—or a new era of economic protectionism?" Thunderbird international
business review 55, no. 2 (2013): 193-212.
Hughes, L. and Meckling, J., 2017. The politics of renewable energy trade: The US-China solar
dispute. Energy Policy, 105, pp.256-262.
Krueger, A.O., 2012. Free trade agreements as protectionist devices: Rules of origin. In Trade,
Theory and Econometrics (pp. 113-124). Routledge.

Assessment Task 2-Essay 8
McNally, C.A., 2012. Sino-capitalism: China's reemergence and the international political
economy. World politics, 64(4), pp.741-776.
Posen, A.S., 2018. The post-American world economy: Globalization in the Trump era. Foreign
Aff., 97, p.28.