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US President Donald Trump’s aggressive trade policy with China and Europe is a “double-edged sword,” bolstering domestic manufacturing and narrowing the trade deficit while hitting the American consumer with rising prices, says an analyst.
“Tariffs on imports have multiple economic effects and depending on what kind of economic values you assign to a particular policy, they can be beneficial or they could be negative,” Keith Preston, chief editor and director of AttacktheSystem.com, said in an interview.
“There is a significant trade imbalance between china and the United States and Donald Trump is trying to correct that,” he told Press TV on Friday.
Trump threatened Friday that he was ready to intensify his trade war with China by imposing tariffs on all $500 billion of imports from the world’s second largest economy.
In an interview with CNBC, the president said Washington is “down a tremendous amount” in terms of trade with Beijing, reiterating his views that China’s trade surplus with the US amounts to “unfair” trading practices.
“I’m not doing this for politics. I’m doing this to do this right thing for our country. We have been ripped off by China for a long time and I told that to President Xi,” he said.
Experts caution that Trump’s trade war could have unintended consequences for the US economy.
New tariffs would translate to an end of “cheap imported goods” that American consumers otherwise would enjoy, Preston said. “The consumer cost could actually rise on a lot of imported goods.”
The analyst said that national security is also “a side issue” in the escalating trade war with China and other countries.
The bulk of industrial manufacturing is related to military production and America’s overreliance on other countries could pose a potential threat to national security, he explained.
“That is one of the reasons that Donald Trump wants to impose tariffs on steel production, that is to encourage the growth of domestic manufacturing in the United States,” Preston said.
Beijing has blasted American unilateralism and filed a complaint with the World Trade Organization (WTO) against the new US tariffs.