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As China opens up, Trump’s tariffs kick in



China’s imports and exports grew faster than anticipated in October despite harsh tariffs imposed by President Trump. It’s still too early to say the tariffs have not done much to harm China’s economy, but these early indicators do not bode well for the President’s plan.

For full disclosure, I’m against the tariffs. President Trump’s adoration for tariffs has shifted a majority in the GOP to favor “fair trade” over “free trade.” But in the modern world economic structure, the effects of tariffs do more damage to consumers and manufacturers reliant on imports. If this truly is just hardball negotiating tactics by the President that result in a swift agreement with China and others facing his tariffs, I’ll stand corrected. But if they continue for an extended period of time, they are a mistake that will harm American consumers and businesses much more than they help.

The original purpose for tariffs in previous eras was twofold. It was a source of revenue for the federal government, so significant that the founders felt it would be the primary source of revenue before income taxes were imposed. They were also intended to help domestic manufacturers and resource producers to be more competitive against a growing international economy.

China has been attempting to change their image as a closed economy for over a decade. They’ve been sending messages around the world that it’s safe and prudent to not only import from China but to open up export markets to China as well. They are modernizing their economy, but in doing so have made some critical mistakes that keep foreign investors skittish, most notably currency manipulation.

Will China start feeling the heat from the tariffs soon? If they do, it’s likely we’ll see a deal as they cannot afford instability in their huge but fragile economy. If they can suffer through the heat and refuse to make a deal, it’s a sign the tariffs aren’t working.


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