As the 2024 Presidential race heats up, the focus is shifting towards who will be tougher on China. Candidate Trump is proposing a 60% tariff on China, while President Biden has implemented 100% tariffs on Chinese electric vehicles and other products. These new tariffs are expected to escalate the trade war with China, putting American exporters and retailers at risk.
Despite the Biden Administration’s efforts to protect the green energy industry, tariffs have historically not been successful and are likely to increase inflation. The decision to add new tariffs without providing relief from previous tariffs imposed by the Trump administration could harm the retail sector and disrupt supply chains. The lack of a coherent trade policy from Team Biden is concerning as the trade war with China continues to escalate.
The US Trade Representative (USTR) was required by law to review the tariffs implemented by the previous administration after four years, but they have decided to keep the old tariffs in place and add new ones. This decision, coupled with the failure to renew important trading legislation, is further complicating international trade for American businesses. The Biden administration’s focus on adding new tariffs instead of promoting balanced trade is hurting the retail economy and stoking inflation.
The Biden Administration’s anti-trade stance is evident in their decision to add new tariffs and halt billions of dollars worth of inbound products at the border under the Uyghur Forced Labor Prevention Act. The lack of clarity in this legislation is causing delays for retailers and importers, who are now required to prove that their goods do not contain forced labor. This uncertainty is further complicating international trade and hindering retail commerce.
The effects of these new tariffs and trade policies are reminiscent of the Obama administration’s failed attempt to impose tariffs on Chinese tires in 2009. The Obama tire tariff saved 1,200 jobs but cost the American consumer about $900,000 for every job saved. With President Biden’s new tariffs, there are concerns that history may repeat itself on a larger scale, further impacting inflation and trade with China. The future of the trade war and its effects on the US economy remain uncertain as the story continues to unfold.
