RE: No it won’t.
Please elaborate.
Are you saying that there will NOT BE job losses, slower economic growth and a drop in exports due to China’s retaliatory tariffs?
Squeezing Jello. That which is lost lands somewhere else very quickly.
The reality is that WalMart will simply stop buying T shirts from China and buy them from Sri Lanka instead. The importer pays the Tariff, not the retail customer.
I don’t think you have good grip on macro economics and trade. We only export $150B per year to China and a lot of it is agriculture stuff which has other markets to sell in. The tariff will only reduce their demand marginally. This hardly moves the needle. $150B in a $20T economy is nothing. OTH the Chinese will see layoffs and lower employment!!!!
“Are you saying that there will NOT BE job losses, slower economic growth and a drop in exports due to China’s retaliatory tariffs?”
I don’t know and neither does whomever wrote that silly report.
First of all it assumes all tariffs will be passed along to consumers dollar for dollar. That is nuts since the Chinese exporters will be hammered from all sides to eat the increases. The pressure will come from the leadership in China which has a stake in so many businesses and is not interested in seeing exports take a hit due to their cost becoming noncompetitive. The exporters also face pressure from the importer here to lower the price of the imported goods to offset the increases brought by tariff increases. Next the wholesaler who buys from the importer will also be demanding a lower price so his price to the retailer remains competitive. Last but not least the retailer will likewise be pressing the wholesaler to either lower his price or lose his business.
To my knowledge anything we buy from China can be bought elsewhere, perhaps for a bit more but also perhaps for the same price we paid before tariff increases.
Since tariffs are placed on the low end of the product cost chain and not the retail end the % is equal to far less a dollar amount. So where a manufacturer may produce a t-shirt for 50 cents and it may retail for $6.00 the 25% tariff goes on the 50 cents cost which amts to 16 cents.
Add to all this the probable fact that the end purchaser will see little or no increase in price.
Quote: “Are you saying that there will NOT BE job losses, slower economic growth and a drop in exports due to China’s retaliatory tariffs?”
It is a War and there are casualties on both sides. So let me ask, who wins wars? Usually the side with less casualties. China sells a crap load more to us than we do to them.
As far as the cost of manufactured goods. Yes, it will increase costs on any company that manufacturers in China and imports into the U.S. But consider this, sooner or later those manufacturers are going to move their operations if they get no advantage for selling into the worlds biggest market. The savings on labor costs will be eaten up by the added cost of import.
As Trump has said, make your stuff in America.
“Are you saying that there will NOT BE job losses, slower economic growth and a drop in exports due to China’s retaliatory tariffs?”
The main American interests who significantly sell in China are ABC (Apple, Boeing, Caterpillar), agricultural commodities, and Natural Gas. The final category are those who provide essential components (like semiconductor chips) for China’s own export products - putting tariffs on them would hurt Chinese exports equally.
Boeing and Natural Gas producers have customers waiting in line for years to come, so they will have little impact. Agricultural bailouts are already prepared, to cover any temporary loses, while commodity delivery orders are re-directed between suppliers and consumers, with no real change in supply or demand.
Apple and Caterpillar have a problem, but not something that would kill their overall business - just their big exposure in China. Most American businesses have long been effectively shut out of China’s domestic market.
There is also the upside of re-shoring, that should be calculated as well - added jobs, additional economic activity and supporting supply chain, facilities construction, and the resulting higher domestic tax revenues, which might offset other domestic taxes.
The tariff revenue itself will likely be spent domestically, to provide some degree of stimulus - and some proportion of that will be coming out of the hide of Chinese producers. The EU, and the UK’s Economist magazine, both estimate that around 80% of the tariff load will be borne by the Chinese themselves, through discounting and currency devaluation.