Donald Trump has talked the talk on China’s unfair trade deals since he announced his campaign for the Presidency in July 2015. Trump aims to confront China’s Xi Jinping over import tariffs of 25% for when U.S. automakers sell in China. According to the article, “When U.S. automakers like GM build in China, they are required by law to form joint ventures with Chinese companies. Those Chinese companies must own 50% or more of the venture.” Contrary to what many believe, China exports relatively few cars to the U.S. per year and is desperate to expand its influence in the automotive industry. However, Trump and White House Counsel Steve Bannon remain skeptical of any deal offered by China though.
Personally, I think Trump should address this issue with China since U.S. automakers produce cars overseas and waste significant costs shipping cars back to the U.S. However, as the article mentioned, it could truly hurt U.S. automotive companies if Trump disrupts relations between the two nations. From previous class discussions, what are the long-term effects of globalization between China/US? In the U.S., hundreds of thousands of autoworkers have been displaced in the workforce. On the other hand, the American Dream has spread to China and some could argue that it weakens their own cultural values.
According to the Office of the US Trade Representative in 2015, the U.S. and China traded over $598 billion in terms of goods. My concern is that Trump’s actions will have a spillover effect and impact other areas of trade, such as household goods, clothing, or steel. The result could be increased costs for U.S. goods, which would decrease the demand for goods within America.