Even With Trade Deal, US Tariffs on China Could Remain
U.S. tariffs on China are likely to remain in place for a while, even if a trade deal is reached, President Donald Trump told reporters Wednesday.
“The deal is coming along nicely,” the president said about the trade talks with Beijing, noting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would be heading to China within days to continue discussions.
“We’re taking in billions and billions of dollars right now in tariff money, and for a period of time that will stay,” Trump said.
The president’s remarks indicated that Washington’s tariffs could stay in place until U.S. officials are convinced the Chinese are adhering to the terms of the agreement.
“They’ve had a lot of problems living by certain deals,” the president noted on the White House South Lawn just before boarding the Marine One helicopter.
China might accept a deal in which most of the U.S. tariffs are rolled back, according to Brookings Institution senior fellow David Dollar, but he said he expected President Xi Jinping would not accept any pact in which no tariffs were lifted.
“It’s very hard for the Chinese president to agree to a deal that’s so clearly asymmetric. Chinese people are so active on the internet and social media, and President Xi will hear about it from the people if he makes a deal that looks bad for China,” Dollar told VOA.
Tit-for-tat tariffs imposed last year ignited fears of a trade war between the United States and China, the world’s two largest economies, which annually trade more than a half-trillion dollars’ worth of goods.
The value of Chinese products sold in the United States far outweighs the value of those sent to China, and that deficit alone represents about 80 percent of America’s overall trade gap in goods.
A pillar of the Trump presidency has been reducing that huge gap by negotiating bilateral trade deals and rebuilding the U.S. manufacturing base.
Trump traveled Wednesday to an area in Ohio where General Motors is set to shutter a car assembly plant, affecting about 1,500 jobs and undercutting the president’s manufacturing revival message.
“What’s going on with General Motors?” Trump asked during a speech. “Get that plant open or sell it to somebody and they’ll open it. Everybody wants it.”
“Intervening to try to keep one factory open isn’t going to do much for the economy” at a time when manufacturing is declining as a share of the overall job market, said Dollar, of the Brookings Institution. “It’s a bad precedent for politicians to intervene like that.”
A resident scholar at the American Enterprise Institute, Claude Barfield, agrees presidents should not intervene in individual corporate decisions.
“The president is woefully ignorant about trade and this part of the economy. He thinks it does help. I don’t think it does at all help,” Barfield, a former consultant to the office of the U.S. trade representative, told VOA.
The closure of the GM plant in Lordstown, according to a Cleveland State University study, will result in a total loss of 7,700 jobs in the region, including supply chain and consumer services employment tied to the auto plant, cutting 10 percent of the gross regional product in the greater Youngstown area.
Trump, in his remarks on Wednesday, placed some of the blame on the United Auto Workers, the union representing the GM workers.
“Your union leaders aren’t on our side,” Trump declared. “They could have kept General Motors” operating the Lordstown plant.
Trump spoke at a facility in Lima that makes the M1 Abrams tank for the U.S. Army, about 300 kilometers from the idled auto factory.
“You better love me. I kept this place open,” Trump told workers at the General Dynamics facility, which was nearly closed six years ago after Army officials told Congress they did not need the additional tanks.
Ohio, which Trump won in the 2016 election by 8 percentage points, again will be a key battleground state in next year’s presidential election.
Polls in the Buckeye State, where the president relies on a strong base of working-class voters, show his approval rating slipping.
Trade and tariffs are “not even the core issue about retaining the manufacturing jobs in this region,” University of Akron associate professor Mahesh Srinivasan, who is director of the school’s Institute of Global Business, told VOA.
Srinivasan said the focus by the Trump administration should not be so much on trade agreements as on “the inevitable march of automation and technology that has displaced workers from traditional jobs. The need of the hour is doubling down with even more emphasis on worker training and education to prepare the workforce for tomorrow’s jobs.”
Tariffs on imported automobiles — as are being contemplated by the White House — “would be counterproductive, like we have seen with steel tariffs,” said Srinivasan, who was part of former President Barack Obama’s Advanced Manufacturing Partnership task force. “It could attract retaliatory tariffs that will negatively impact numerous automobile manufacturers in Ohio and other Midwestern states, which today are supplying to automobile manufacturers globally.”
Some trade analysts agree that Trump’s metals tariffs on Canada and Mexico have hurt American manufacturing, including making U.S. auto plants less competitive.
Patsy Widakuswara and Elizabeth Cherneff contributed to this report.