The trade war with China hits its fourth anniversary this year, with the Biden administration set to soon begin a review of the Section 301 tariffs first imposed by former President Donald Trump in 2018. Since then, these tariffs have taxed American business owners nearly $130 billion for the goods they need to stay afloat.
A new study from the International Monetary Fund sheds light on the damaging effects of trade wars, noting that “bilateral tariff wars hurt the two parties involved the most,”as expenses grow in the countries that impose tariffs.
As one business owner wrote in The Well News ahead of President Joe Biden’s first State of the Union address earlier this month, “Tariffs are taxes that the American government levies on American businesses for the cost of importing the things they need … That is money that businesses could reinvest to grow, hire new employees and light the spark to power a full economic recovery.”
The trade war has proven to be a failed experiment, not just because of the costs that businesses are forced to bear in the U.S., but also because China has come up well short of its obligations under the Phase One Trade Deal. Dan Digre of MISCO Speakers recently wrote on the second anniversary of the trade deal for Entrepreneur:
“When the previous administration first put the tariffs in place … it claimed that they would give the U.S. leverage in its negotiations with China, insisting that China would be ultimately responsible for paying the cost of the tariffs. However, that simply isn’t true, no matter how many times some have claimed it is. The tariffs haven’t been an effective way to hold China accountable; they’ve been an incredible burden on our economy.”
The need to lift the tariffs is also growing increasingly urgent as record inflation continues to batter American industry, which RedState contributor Christopher Arps recently discussed:
“President Joe Biden and U.S. Trade Representative Katherine Tai should … end a trade conflict that, while well-intentioned, has ultimately backfired on American businesses, workers, families, and consumers … This action would provide an immediate boost to struggling businesses — that the vast spending packages still being debated in Washington haven’t.”