Question

USA is in big trouble. USA don’t win anymore. USA lose to China [in trade]. What is wrong with USA economic logic about international trade?

Answer 1

Trump’s abandonment of existing U.S. trade agreements can make China as the world’s leading economic power.  

Recently ,Trump forced 25% tarriff on steel imports and 10% on aluminum imports.USA is putting these tariffs to safeguard American jobs, but many economists believes that the impact will be rise prices for users of steel and aluminium, such as the auto and oil industries. This will destroy more jobs than curbs on imports create.

In response to this economic policy China will ceertainely take necessary measures to protect its legitimate rights and interests.Most of American high tech equipments are manufactured in China. China can stop this,then American companies would be hurt more than Chinese manufacturers. USA imports only a small share of steel from china. Whereas China is as a huge market for USA. By the end of 2015, Chinese consumers bought 131 million iPhones. The total sales to U.S. customers during the same period stood at only 110 million. And iPhones are only a small part of U.S. exports. Apart from this China gives employment to a lot of Americans. Boeing, which employs 150,000 workers in the U.S., estimates that China will buy some 6,810 airplanes over the next 20 years, and that market alone will be worth more than $1 trillion. USA would certainily lose these employment opportunities.

Also, these economic policies can trigger punishments against the U.S. in the World Trade Organization (WTO), and may even prompt higher tariffs against U.S. exports.This situation is very harmful for American business and employment.