Protectionism cannot bring economic prosperity
ECONOMIC theories have proved that tariff and other forms of protectionism cannot bring economic prosperity, Jon R. Taylor, a political science professor at University of St. Thomas in Houston told Xinhua.
Taylor said that “trade tariffs are a losing proposition for the US, for China, and for the global economy.”
The standoff started with the United States on Tuesday announcing a proposed list of products subject to additional tariffs. It covers Chinese exports worth some US$50 billion with a suggested tariff of 25 percent.
China on Wednesday replied to the protectionist action with its own tariff plan — a list of products imported from the United States worth US$50 billion that will be subject to higher tariffs. China’s Customs Tariff Commission decided to impose additional tariffs of 25 percent on 106 US products under 14 categories, including soybeans, automobiles and chemical products.
In a salvo to that, US President Donald Trump on Thursday threatened to slap additional tariffs of US$100 billion on China, saying he has instructed the US Trade Representative to consider whether such tariffs would be appropriate.
Taylor commented that US President Donald Trump’s push for the punitive tariffs is motivated by the country’s domestic politics rather than by economic theory.
“The tariffs are not going to work and will likely have a negative impact on both China and the US economies. Tariffs and a potential trade war will ultimately make US exports less competitive, not more competitive. And it will result in lost American jobs and increased costs for American consumers, not increased jobs or cheaper products,” the professor continued.
Talking about the trade deficit between US and China, Taylor admitted getting China to lower some of its barriers on foreign imports “might” diminish the deficit by a small amount, “but China can’t afford to pay the cost of America’s high-priced goods and services to make a significant dent in the trade deficit.”
According to Taylor, even if China is forced to scale back on its exports to the US, it will not have the effect that the Trump administration hopes, which is to boost American domestic manufacturing and bring back jobs. Asked the impact of the possible tariffs on China-Texas economic ties, Taylor said if these tariffs continue, it will eventually hurt both the Texas and Houston economies.
“Trade between the Houston region and China was valued at nearly US$19 billion. A drop off in energy, medical tech-related equipment or services will have an impact on both Texas and Houston.”