Unpacked: The US-China Trade War

THE ISSUE: On Monday July 9, in the most extensive trade protections in nearly a century, the White House implemented a 25 percent tax on Chinese imports.

China retaliated in force with a 25 percent tax on U.S. automobiles and agricultural products, such as soy beans.

  • Exports to China are concentrated in agricultural products like soybeans, plus automobiles and Boeing aircraft sales. The trade war is already having an effect on those sectors.
  • The U.S. exports cars from Southern states like Tennessee, so the effects of this change will be felt there.
  • While China is the final assembler from many products, actually more than half of the value of those products are in parts and components from other countries like South Korea and Japan—so there will definitely be collateral damage from U.S. tariffs.
  • It’s hard to see the off-ramp right now. The U.S. has announced $250 billion of tariffs on products from China, and China has partially retaliated and will probably come out with more retaliation.

Source: Unpacked: The US-China Trade War

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