Trump has again made a sweeping policy statement against trade with China. Our trade agreements with China are complex and involve many more nations than China. His statement that he would impose a 10% tariff on all goods coming from China will harm many more people in the U.S. and elsewhere.
The actual consequences of doing this are more far reaching than we can calculate.
Currently there are 100 nations, including many in the Pacific Rim that have China as their principal trade partner. If China sinks further into it's own recession, other nations which have China as their chief trading partner like South Korea, will also go into recession reducing U.S. exports around the globe.
Trump's tariff would spark a trade war between China. It would likely trigger retaliation in Cyberspace as well.
Assuming that Americans will continue to buy goods imported from China and other nations with the 10%, the cost base for durable goods will go up, hurting the most financially vulnerable and well as the middle class. The truth is we are not prepared to ramp up production at an affordable cost for the items we purchase overseas. We are no longer a nation of manufactures, but a nation moving steadily toward employment in service industries.
Finally, our trade agreements around the world will come into question and our relationships with other nations will be viewed as unreliable, protectionist and no longer of value.
One can only hope that Donald Trump begins getting his briefings in foreign trade affairs quickly. He will not have the luxury of time once in office.
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