Trump’s tariff tactics only erode American Dream

By Xiao Xin Source:Global Times Published: 2019/8/4 19:53:40

Ceding the top position to Mexico in US trading partner rankings will have only a trifling impact on China, whose manufacturing prowess remains unparalleled. 

In a fresh sign of the disheartening aftermath of trade tensions between the world's two largest economies, US government data released on Friday showed that Mexico unseated China as the US' top trading partner for the first half of the year. 

US imports from China fell by 12 percent year-on-year in the first half, while exports to China declined about 19 percent. The decline of bilateral trade deprived China of the top spot, which it had held since 2015, putting it in third place after Canada.

The change in rankings made headlines, but it's unlikely to deal a big blow to China. What's more, it provides proof of the trade war's self-inflicted wounds - it won't bring jobs back to the US, nor will it underpin US growth which weakened to 2.1 percent in the second quarter of 2019.

The US government's tariff war has hit the nation's trade with China, as evidenced by the latest figures. But the scenario that US President Donald Trump envisioned - regaining American manufacturing jobs - is not happening. 

Uncompetitive labor costs have impeded manufacturing job realignment in favor of the US, and the US is barely comparable to China in terms of manufacturing strength. That means Trump's ambitions are no more than an unachievable vision. A slowdown in US job growth in July arguably showed that rising tariffs have started to bite the American job market, contrary to what the Trump administration had expected.  

Trump's latest threat to impose an additional 10 percent tariff on all the remaining $300 billion worth of Chinese imports will have even more dire implications for the US job market and the US economy at large. That goes far to explain why there's been a rising outcry in the US against Trump's escalating tariffs and threats.

Some businesses have been forced into moving part of their production out of China into markets such as Southeast Asia. But this doesn't affect China's still unrivalled strength in the manufacturing arena. This strength can be measured by its ability in dealing with a wide-ranging array of product categories and varied components of supply chains. The US government's trust in trade war tactics won't derail the pursuit of made-in-China products.

China's foreign trade, which expanded in the first half - albeit at a slower pace - attests to the nation's manufacturing prowess. Chinese customs data showed that the nation's yuan-denominated foreign trade rose by 3.9 percent year-on-year in the first half, with exports up 6.1 percent and imports up 1.4 percent.

The position change of US trading partners serves as a wake-up call for China to revamp its manufacturing sector, nevertheless, which suggests moves to diversify trade destinations and shift toward higher-end manufacturing. At the end of the day, the US tariff escalation will only end up eroding the American Dream. 

The author is a reporter with the Global Times.


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