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Americans Won’t Get a Total Reprieve After China Trade Deal as Effects of Lost Factory Jobs, Pricier Goods Linger
The government entered a deal with China that saw President trump and his government agree to avoid further tariff imposition on Chinese goods. However, this deal does not affect much the tariffs that President Trump imposed in 2019. Although it is important to mention that the deal includes a 50% cut in the tariff rate imposed on $120 billion worth of Chinese products in September of 2019. In microeconomics, the move to enact tariffs is for a number of reasons that government feels will benefit its economy. These reasons include ensuring a low unemployment rate, protecting local infant industries, and to protect consumers. However, the motive around President Trumps tariff imposition is national security and the disregard for these other factors may have unmatched consequences. China in its part has retaliated imposing high tariffs on products from the USA as well.
Consumers bore the weight of the Tariffs imposed on Chinese products in all sectors except steel according to the National Bureau of Economic Research. However, the government can support its claim by quoting the strong consumer spending and the significantly low unemployment rates. This does not mean buyers are not suffering from the inconvenience of going for alternatives that may not so well fit their preferences.
As mentioned earlier, the tariffs imposed on Chinese goods prior to the deal still remain and stand at around $370 billion. This is a possible huge problem now and going forward for American manufacturers who rely on components from china in their assembly lines. Although the effects are not felt significantly yet, they are still lingering. There have been layoffs in the manufacturing industry since the imposition of these tariffs in June of 2018. The microeconomic effect felt in this case could mainly be from China retaliating and imposing as much tariffs on goods from the USA and curtailing its manufacturing efforts.
