Though President Donald Trump’s aim has been to tap tariffs as a tool to help bring U.S. trade and manufacturing back into balance — which he hopes will fuel domestic employment — a new study shows the tariffs on China, in particular, could destroy thousands of American jobs.
If the Trump administration’s proposed levies on $50 billion worth of Chinese imports over purported intellectual property offenses, plus China’s promised retaliations, which would include tariffs on 106 U.S. goods, cotton among them, do take effect, 134,000 U.S. jobs could be destroyed — not to mention nearly $3 billion in U.S. GDP.
That’s the count, according to a study released Tuesday by the National Retail Federation and the Consumer Technology Association, which said: “Four jobs would be lost for every job gained.”
The situation could snowball if Trump decides to move forward with the additional tariffs on $100 billion worth of Chinese imports he’s been mulling over for nearly a month, and for which a list of targeted items has been rumored to be forthcoming. If those tariffs take shape, according to the study, it could destroy as many as 455,000 jobs and serve as a $49 billion-dollar blow to GSP.
“Tariffs could wash away the benefits recent tax reform will have on the economy, bringing uncertainty to American businesses and devastation to some workers in key states — they might lose their jobs over a trade tax,” CTA president and CEO Gary Shapiro said. “Rising costs on farmers, manufacturers and service providers isn’t the answer; it shows protectionism will weaken America.”
And the agriculture sector could be the one most weakened. According to the study, the industry could lose as many as 67,000 jobs, and farmers’ net income would decline by 6.7 percent. “And the hit to the farmers would more than double if the tariffs expanded to an additional $100 billion of products. Farmer income would drop by 15 percent, and jobs in the sector would decline by 181,000,” the study warned.
Breaking those job losses down further, NRF and CTA said California, Texas, Florida, Washington, New York, Georgia, Missouri, Pennsylvania, North Carolina and Ohio would be hardest-hit.
For consumers, the consequence of these tariffs would come in the form of higher costs. Taking TVs as an example, the retail organizations said a TV made in China that costs American consumers $250 today would cost them $308 if the tariffs took effect. That’s a 23 percent price hike.
With so much at stake depending on how these tariff wars shape up, tensions span the globe.
On Monday, Trump extended the talks on steel and aluminum tariff negotiations for another 30 days, which, to some, including the EU, only serves to drag out uncertainty, but for now it means key allies aren’t yet subject to the 25 percent tax on steel exports to the U.S. and 10 percent on aluminum. Canada, Mexico and the EU have been temporarily exempted from the tariffs, as has South Korea in exchange for its commitment to ship 30 percent less steel to U.S. shores. China, however, seen largely as the target of these metal tariffs, was not exempt, and the U.S. action gave rise to its tariff retaliations.
On Thursday and Friday, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are expected to visit China for talks on tariffs and trade, and many are hopeful that it will mean some reasonable resolution is reached.
“We are encouraged by Treasury Secretary Mnuchin and U.S. Trade Representative Robert Lighthizer’s visit to China and wish them success addressing China’s problematic trade barriers,” Shapiro said. “We believe it is best for the administration to seize on China’s willingness to negotiate to achieve positive outcomes for U.S. workers rather than via tariffs that ultimately harm us.”