WHY THE UNITED STATES DECLARE THE TRADE WAR TO CHINA

WHY THE UNITED STATES DECLARE THE TRADE WAR TO CHINA

Donald Trump is Furious because of this graph

 Every year, the United States owes China $ 375 billion

The US president accuses the Chinese of unfair competition. Trump criticizes China for failing to fully respect the rules of the game of international trade: to subsidize its companies too much, to reserve its public contracts to Chinese companies. He also criticizes the looting of American technologies, notably by the Chinese buybacks of companies from the United States and also by the transfer of technologies that are imposed on foreign companies that set up in China..

It cannot be said that Trump is completely wrong about the grievances he is making in Beijing. China is not the only one concerned.

Europe too is designated as a commercial enemy. The idea of ​​Donald Trump is to hang a ball at the foot of foreign products, to make them less competitive compared to American products. This ball is a tax, which is imposed to enter their market, and therefore makes them more expensive. A form of protectionism.

Among the first affected products: solar panels, washing machines, then steel, aluminum, bulldozers, etc.

And the movement continues. In some cases, protectionism can make sense. For example, it helps to protect an emerging and growing industry from external competition and to create jobs. In fact, that's what the Chinese do. This is what they did for example with Alibaba. They closed their country to competitors, Amazon-type companies, to allow Alibaba to become a giant. Taxing foreign products can seem simple and effective.

But this technique is not without risk and can even be counterproductive.

First, who says trade war, says opponents, and when there are opponents, they can reply. That's exactly what China decided to do.

In turn, China has started taxing US products entering the country: soy, pork or cotton. As a result, American farmers have suddenly become much more expensive,

and they have trouble selling their products in China. So much so that Trump was forced to provide them with $ 12 billion in emergency assistance. Secondly, if you buy so many foreign products, it is often because they are cheaper. To tax them is to make them more expensive, and it is ultimately the US consumer portfolio that is affected.
Example: Coca-Cola. The company is buying some of the metal from its cans in China. It has announced that its production costs have been weighed down by Trump's policy. And she will increase the price of her sodas. The Chinese government has not failed to point out these contradictions. Last but not least, reducing trade with a foreign country does not mean that one will automatically develop plants in one's own country. Tariffs against China should mechanically reduce US imports a bit from China. But studies show that at the same time, Americans should import more from other countries, such as Mexico and Canada. Why ? Because there are products that they will not be able to produce on their soil.
Either because it will cost them too much, for all the components at low cost, or because they do not have them, like some raw materials And the other problem is that the United States already has a rate of extremely low unemployment, less than 4%. So even if they can get plants back, they will have a labor problem. They will lack their arms. Solution proposed by some manufacturers to fill this lack of manpower:

revive immigration.

             An idea that Donald Trump seems far from accepting.

Hassabou

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