China Trade Deal Has ‘Hurt American Consumers’
Come check out our blog to learn more about how the recent China trade deal, which was supposed to provide economic relief to Americans, has ended up causing more harm than good.
The deal between the US and China, which was supposed to provide economic relief to citizens, has turned out to cause more pain than relief. The phase one trade agreement, signed during President Donald Trump's administration in early 2020, includes China's commitment to buy up to $200 billion in American goods and change its trade practices.
The Drama Surrounding the Economic Relationship
Beginning from the 2016 general elections, President Donald Trump accused China of being the primary cause of loss of manufacturing jobs and carrying out "the greatest theft in world history." He then embarked on a campaign to reform the US-China trade relationship by laying out a four-part plan:
1. Declare China a currency manipulator
2. Confront China on intellectual property and forced technology transfer concerns
3. End China's use of export subsidies and lax labor and environmental standards
4. Lower America's corporate tax rate to make US manufacturing more competitive
With $360 billion in tariffs on Chinese products hanging in the balance, many Americans have expressed their concerns about how the trade agreement between the two economic behemoths has failed to deliver on its promises, instead harming American consumers.
In an interview with The New York Times, Janet Yellen expressed doubt on the deal's merit, saying the agreement has failed to address the most pressing disputes between the world's two largest economies. The remaining tariff in place has hurt more American citizens.
Speaking further on how the deal has affected the economy, she remarked that, "tariffs are taxes on consumers. Sometimes, it seems to me what we hurt American consumers, and the type of deal that the prior administration negotiated didn't address the fundamental problems we have with China."
Profound Consequences
The trade deal has severely affected the automobile production industry in the US. Reacting to President Trump's imposition of a 25% tariff on imported gasoline-powered and electric vehicles from China, China's car manufacturing company, Guangzhou Auto, has halted plans to delve into the American automobile industry. Other American automobiles makers like Ford have also ended their plans to import low-cost cars from China into the US. The gross effect of these actions has resulted in the price hike of automobiles in the US as China diverted its low-cost vehicles to Asia and Europe.
Phase one of the trade deal also demands China to stop using government power to force foreign companies to transfer their technology assets to the Chinese government. Despite a large-scale purchase of American products, the trade deal agreement has not met the overall details of the trade deal.
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