Will Ivanka teach Trump that tariffs add up to a lose-lose situation for China, US?

By Hu Weijia Source:Global Times Published: 2018/7/16 22:43:40

As US President Donald Trump drags many US companies into a trade dispute with China, some Western observers have noted critically that Ivanka Trump's clothing and shoe businesses are exempt from her father's tariffs on Chinese goods.

On July 6, US tariffs on $34 billion worth of Chinese imports went into effect. The tariffs mainly target production facilities, nuclear reactors and aircraft, instead of final consumer goods such as clothing and shoes. It seems that Ivanka's businesses were luckily unscathed in her father's willful trade friction with China.

The US to a large extent relies on China to make footwear and garments. According to the South China Morning Post, about one-third of the clothing and 72 percent of the shoes sold in the US are from China. If Trump escalates trade frictions with China by raising tariffs on clothing and shoes, the most likely outcome is that most apparel brands will have to increase their selling prices in the US. The tariffs will ultimately be transferred to US consumers, making them the biggest victims of Trump's tariffs.

We don't think Trump excluded clothing from the $34 billion tariff list because he wants to benefit his daughter's businesses amid the trade disputes. In a bid to prevent a large increase in the cost of living, it's understandable that Trump may try to avoid adding daily necessities to the list. Amid escalating trade tensions, a change in consumer prices will soon translate into political pressure on Washington.

Ivanka has a range of business interests in China, reportedly holding dozens of trademarks in the country. While China and the US are locked in a trade dispute, Ivanka's businesses in China will not become a target of revenge toward Trump's tariffs. On the other hand, China won't offer special favors to Ivanka's businesses in a bid to persuade her father to tone down the trade dispute.

The Chinese government is likely to treat Ivanka's businesses and other US enterprises on an equal footing. The first daughter won't receive any special treatment from China.

Hopefully all garment producers can remain immune to the trade friction. But if Trump wants to further escalate trade friction with China and drag his daughter's businesses into a trade war, we believe Ivanka will teach her father why a trade war would be a lose-lose situation for both sides.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY,CHINA-US

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