Who Benefits from US Tariffs on Chinese Imports? Experts Weigh in - Latest Global News

Who Benefits from US Tariffs on Chinese Imports? Experts Weigh in

The trade war between the United States and China continued this week with its latest salvo – a move that comes amid a heated race for the White House.

On Tuesday, US President Joe Biden announced tariff increases on imports of various Chinese goods worth $18 billion.

Lithium-ion batteries account for $13 billion of total imports, while certain steel and aluminum products, as well as items such as medical gloves and syringes, accounted for the remaining $5 billion.

Experts say tariffs on these products are likely to have a limited impact on consumer goods prices and economic growth. The bigger gain, they say, could be at the ballot box as Biden seeks a second term in the White House.

“These tariffs are very limited and the impact on the economy will be a rounding error,” Bernard Yaros, senior US economist at Oxford Economics, told Al Jazeera.

Even if the tariffs don’t change much for the U.S. economy, it’s still “good policy to do this,” especially in an election year, Yaros added.

Project strength

A US presidential election will take place in November and Biden is expected to face his predecessor, former Republican President Donald Trump, in a closely contested race.

Trump has long tried to project a tough man image, particularly on foreign policy and the economy, while describing his Democratic rival as “weak.” But Biden has tried to deflect that criticism by pushing policies that in some cases build on Trump’s.

A January article (PDF) from the National Bureau of Economic Research suggests that tariffs can pay political dividends even if they don’t result in “substantial employment gains.”

The paper covered the period from 2018 to 2019, when Trump imposed steep tariffs on China and other countries targeting products such as aluminum, washing machines and solar panels.

It found that residents in U.S. regions more exposed to import tariffs were less likely to identify as Democrats and more likely to vote Republican.

The report concluded that voters responded “positively” to the tariffs “despite their economic costs,” which came in the form of retaliatory tariffs from China.

“Tariffs are good policy, even when the economy isn’t working,” Yaros said.

Appeal to the Rust Belt

Biden and Trump are neck and neck, with some polls showing the Republican candidate edging out the incumbent in key swing states.

A poll this week showed former US President Donald Trump with an advantage over President Biden in some key states [File: Brendan McDermid and Elizabeth Frantz/Reuters]

A New York Times, Siena College and Philadelphia Inquirer poll this week, for example, showed Trump with an advantage in key states like Arizona, Nevada and Georgia.

Biden appeared in one of those states, Pennsylvania, last month to announce his intention to triple tariffs on Chinese steel. Pennsylvania is part of the Rust Belt, a region historically known for its manufacturing industries, and the state itself is famous for its steel production.

Brad Setser, senior fellow at the Council on Foreign Relations, said Biden has also sought to protect other U.S. industries, such as the emerging electric vehicle (EV) sector.

Its new trade rules would ensure that the U.S. cannot directly import electric vehicles made in China, Setser said.

He added that China has built a competitive electric vehicle industry thanks to extensive government subsidies and without such measures could flood the global and US markets with cheap cars.

“China, with its significant automotive needs, has provided numerous subsidies to its electric vehicle industry, which have led to this strength,” Setser said.

“It must be recognized that the US and Europe will use some of these techniques [of subsidies and tariffs] to build their own industries. It is unrealistic for China to object to other countries doing the same.”

Protecting the American auto industry will also help Biden in the polls. The sector’s focus has historically been in Michigan, another key battleground state where Biden has recently faced backlash.

Michigan is the birthplace of the “Uncommitted” movement, which encouraged Democrats to withhold their votes from Biden during the primaries and instead vote for the “Uncommitted” option.

The protest was seen as part of a broader, largely progressive backlash against Biden’s unwavering support for Israel’s war in Gaza.

I’m looking forward to November

However, experts who spoke to Al Jazeera questioned whether Biden’s newly announced tariffs would make a difference in the election campaign.

According to the US Census Bureau, the US imported $427 billion worth of goods from China in 2023, but in return only exported $148 billion to the country.

This trade gap has existed for decades and is becoming an increasingly sensitive issue in Washington, especially as China competes with the United States for the spot as the world’s largest economy.

Although trans-Pacific trade has brought benefits to both countries — providing cheap goods to American consumers and a large market to Chinese manufacturers — it remains a contentious issue, particularly at election time, because of a history of moving U.S. manufacturing jobs overseas.

U.S. politicians have also raised privacy concerns as Chinese technology enters the North American market.

Although China has promised retaliation for the latest round of tariffs, experts say this will likely be symbolic since the U.S. tariffs themselves are highly targeted.

“We do not expect the retaliation to be disruptive,” Yaros said. “They’re not going to raise the stakes. That wasn’t her MO [modus operandi] in the past when the US imposed tariffs.”

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