BEIJING: A spokesperson for the Chinese Embassy in the U.S. said no one will win in a trade war after U.S. President-elect Donald Trump pledged new tariffs on products from China on Monday.
Trump, who will take office on January 20, 2025, said he would impose “an additional 10 percent tariff, above any additional tariffs” on China, in some of his most specific comments on how he will implement his economic agenda since winning the November 5 election on promises to “put America first.” He also said he would impose a 25 percent tariff on imports from Canada and Mexico.
Liu Pengyu, the Chinese spokesperson, stated “China believes that China-U.S. economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a tariff war.”
In an interview last year, Trump had suggested a universal 10 percent tariff on all imported goods. A study released in November by the National Retail Federation (NRF) warned that if this new tariff proposal were implemented, it could reduce U.S. consumers’ annual purchasing power by up to $78 billion. The study highlighted that such tariffs would impact consumer goods categories such as apparel, toys, furniture, appliances, footwear and travel items.
Tariffs are initially paid by importers or intermediaries working on their behalf, but the costs are usually transferred elsewhere. While Trump claims that exporters ultimately bear the cost of tariffs, research indicates the reality is more complex. Once tariffs are implemented, importers could choose to offset these costs by raising prices for consumers at the checkout. Foreign manufacturers might lower their prices to maintain relationships with importers, or they might invest heavily in relocating production to bypass the tariff altogether.
A Reuters analysis noted that American consumers have become more frugal in recent years, cutting back on non-essential spending. This trend has placed significant pressure on retailers and consumer goods companies.
Jonathan Gold, NRF’s vice president of Supply Chain and Customs Policy, stated that retailers rely on imported goods and components to offer diverse and affordable products. He cautioned that the proposed tariffs would disproportionately burden low-income households, as the costs of tariffs are ultimately passed on to consumers through higher prices.
Additionally, Trump aims to attract more investments and boost employment by imposing tariffs. However, experts warn that such measures could trigger retaliatory tariffs, leading to job losses in other areas of the economy.
A respected study published by the National Bureau of Economic Research in January, authored by David Autor, Anne Beck, David Dorn and Gordon Hanson, found that the tariffs introduced in 2018 and 2019 under Trump failed to create jobs in the industries they were meant to protect. Instead, they resulted in job losses in sectors impacted by retaliatory tariffs, particularly in agriculture.
