China tariffs could hit US economy, jobs

Bloomberg

President Donald Trump says his trade actions may cause “a little pain” in the short term, and a new study shows US agricultural workers could be hurt the most.
The tariffs on $50 billion in Chinese imports that Trump has proposed, plus promised retaliatory duties by China, would reduce US gross domestic product by $2.9 billion and cost almost 134,000 US jobs, according to a study commissioned by the Consumer Technology Association and the National Retail Federation, which oppose the tariffs. That includes more than 67,000 jobs in agriculture. States that Trump won in 2016 would lose about 77,500 positions, the study found.
As Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and other administration officials head to China this week for trade talks, the study shows the estimated impact on the American economy if the tariffs are imposed and a trade war ensues, the groups said.
“We must resolve this dispute without resorting to job-killing tariffs and retaliation,” National Retail Federation President and Chief Executive Officer Matthew Shay said in a statement. The Trump administration has targeted more than 1,300 Chinese products, from televisions and backhoes to ingredients for insulin, for tariffs of 25 percent in response to complaints about China’s theft of intellectual property.

Threats and Counter-Threats
That prompted China to promise retaliatory duties on soybeans, aircraft and other products. Trump then ordered consideration of an additional $100 billion in tariffs that the administration hasn’t yet identified. The study, completed by the Washington-based consulting firm Trade Partnership Worldwide LLC, estimated the effect on employment under different scenarios. The most probable scenario has the US imposing $50 billion tariffs with promised Chinese retaliation, according to the study.
Under that scenario, some sectors, including machinery and electronics manufacturing, would add jobs as reduced imports bolster US production, the study found. But for every job gained, more than four would be lost during the first years after tariffs were imposed as higher prices reduce consumer spending and farmers in particular are hammered by Chinese duties, the study said.
“Rising costs on farmers, manufacturers and service providers isn’t the answer,” Gary Shapiro, chief executive and president of the Consumer Technology Association, said in a statement. “It shows protectionism will weaken America.”
Ross and other administration officials have downplayed the effect of the tariffs on the US economy. Trump has acknowledged that American markets and farmers could face “a little pain” but that the country would be better off in the long term.
“Short term, you may have to take some problems,” Trump said during an April 28 rally in Michigan’s Washington Township. “Long term, you’re going to be so happy.”