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【评论精粹】Trump's Trade War Has Unified the World Against US Exports

发布时间:2018年07月11日         来源:Peterson Institute for International Economics         点击次数: 次         【打印
  • Jeffrey J. Schott (PIIE) and Euijin Jung (PIIE)
  • US trading partners retaliating against US Section 232/301 tariffs—Canada, China, EU-28, and Mexico—accounted for $939 billion or 61 percent of total US merchandise exports in 2017.
  • Retaliatory tariffs affect $65.9 billion (out of $939.3 billion) of US exports or 7 percent of US shipments to those countries.
  • US products targeted by retaliatory tariffs represent 15 percent of global US exports of those products ($65.9 billion out of $435.9 billion).
  • Retaliatory tariffs hit a substantial share of US global exports of sorghum (93 percent), soybeans (65 percent), whiskies (54 percent), pork (42 percent), and almost one-third of cheese, apples, and steel.

President Donald Trump’s trade war reflects his administration’s strategy of trying to gain leverage against trading partners by dealing with them one by one. But like so much else about the president’s approach, this strategy has backfired. Instead of dividing US trading partners, Trump has unified them in their retaliation against his trade actions to protect US steel and aluminum industries and to counter Chinese high-technology policies.

In short order, Trump has provoked retaliation by Canada, China, the European Union, and Mexico, which account for more than 60 percent of total US merchandise exports.[1] While the aggregate retaliation to date covers only $66 billion of US exports, 15 percent of total US exports of those products, the impact on specific products is much greater because several countries are targeting many of the same products.

Is there a conspiracy among US trading partners to achieve this result? Probably not. They long ago learned to target trade retaliation to provoke maximum political backlash within the United States while minimizing the economic pain inflicted on their own consumers. Accordingly, they retaliate against US products for which they can find suitable substitutes from other countries (or from ramped up domestic production). The prime targets are US soybean, grain sorghum, and dairy farmers, pork producers, distillers, and automakers. Table 1 reports the value in 2017 of US exports subject to retaliatory tariffs.

In some cases, US shipments are concentrated in one market: China bought 65 percent of US soybean and 93 percent of grain sorghum exports last year as well as 27 percent of US fish and crustaceans and 20 percent of US exports of autos and parts. US exporters earned $28 billion on shipments of those products to China in 2017. China’s imposition of an additional 25 percent tariff will sharply erode their sales and profits.

US pork exporters, already facing losses from Trump’s withdrawal from the Trans-Pacific Partnership (TPP) negotiated by President Barack Obama, have been hit by tariffs imposed by Mexico and China affecting $2.4 billion or 42 percent of their world shipments. Those two countries also have hit about $450 million of shipments of US cheese or almost a third of US cheese exports.

All four trading partners have retaliated against US steel and aluminum in reaction to Trump’s Section 232 measures, imposing tariffs on 31 and 34 percent of US exports of those products, respectively. Each country’s retaliation list also includes whiskey in a bow to local producers and a blow to Jack Daniels—affecting 54 percent of US global shipments.

As these numbers show, US industries and farmers are already getting slammed. If Trump escalates the trade war to another $200 billion of Chinese products, as he threatened to do on July 10, and extends US tariffs to $350 billion of US imports of autos and parts under a newly launched national security case, the cost in lost sales abroad, and output and jobs at home, will be substantially higher.

NOTE

1. Turkey and India also notified the World Trade Organization that they would impose additional tariffs against the United States in response to US steel and aluminum tariffs.

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