Question

How significant will Trump's imposed tariffs on China be in the long run?

In 2018 the U.S had a $419 billion trade deficit with China. This was mainly because U.S. exports to China were around $120 billion and imports from China were $540 billion. China also buys so many U.S. Treasury notes that it is the largest lender to the U.S. Government. As of this past December, the U.S. owed $1.12 trillion to China. As most of us know, the U.S. is known for importing everything from computers and phones to footwear and t-shirts from China but Trump's presidency has complicated this trade relationship.

A lot of Trump's presidential campaign was about "Real" Americans and bringing back jobs to the U.S. and as the slogan goes, making America great again.

One of the ways that he accomplished this is by promising to lower this trade deficit with China by imposing tariffs. In particular, he announced a 25% tariff on steel imports and a 10% import on aluminum. This has effected around $34 billion of Chinese imports. Not only does this have an effect on the imports to the U.S., it also affects Chinese companies based in the U.S. and the price of Chinese goods imported to the U.S.

My question is: how significant will these tariffs be for the U.S. and for China in the long run?

Answer 1

When US has impose tariffs on China then China accused US fir launching trade warMr. Trumph has imposed taxes on imports from China in order to encourage consumers to buy American products.

The US has imposed 3 rounds of tariffs on Chinese products in 2018 which is total of 250 billion dollar worth of goods.

It has been said that even more could be imposed by US. It means that all China's export to US would be subject to duties.

From US side:

1. It will stop unfair transfer of American technology and intellectual property to China.

2.It will ultimately protect jobs.

3.Tariff will make US made products cheaper than imported products. It ultimately encourage consumers to buy American goods.

4.It has been expected that it will boost local business and help the economy.

From China side:

1.At present, it will slow down Chinese economy  

2.China's growth could be slowed down by 0.5 to 0.6% in 2019 due to tariffs.

I'm order to retaliate tariffs it will try to let its currencies fall. It will offset the effect of tariffs.

But it may risk the capital.

In the long run, China will let its currency weaker in order to put pressure on US companies in China It will shift its reserves out of dollar and into other currencies aa well.