Tides Turn in the Trade War

The last trade war was fought over bananas ending in 2009. But recently, a new trade war has emerged between the world’s two largest economies: the United States and China.

Both sides have placed massive protective tariffs on an array of products currently totaling over 34 billion, and more are expected to take effect later.

If that’s not enough to qualify as a trade war, President Trump has announced plans to place tariffs on all Chinese goods representing totaling over 500 billion dollars.

The Chinese can place a maximum of 175 billion dollars in tariffs, because China imports only 175 billion dollars in U.S made products.

While this seems like a lot, it pales in comparison with the United States importing over 500 billion worth of Chinese goods. This leaves a trade deficit, or imbalance of imports and exports, between China and the U.S of 175 billion dollars.

The tariffs started after Donald Trump believed it was necessary to punish China for unfair trade practices.  China forces U.S companies to forfeit all technology and research upon conducting trade with China, and this is considered illegal by the World Trade Organization (WTO).

The U.S ships 175 billion in goods and China ships back 500 billion in goods.

President Trump has correctly identified the problems, but the solutions are off.

Trump should have appealed to the WTO for China’s unfair trade practices.

Then, the WTO would have either set guidelines for China to correct their trade imbalance or a multitude of countries would have banded together to condemn China for failing to follow the WTO’s directions.

With support from other nations, China would have to alter their methods or risk heavy economic downturn.

Hopefully, President Trump’s plan works out, though, as it could correct a problem that has been circulating since the 90’s.