The potential negative effect in economic filed will be led by increasing tariffs in Sino-US trade

下面为大家整理一篇优秀的paper代写范文- The potential negative effect in economic filed will be led by increasing tariffs in Sino-US trade，供大家参考学习，这篇论文讨论了中美贸易关税的提高将对经济领域产生潜在的负面影响。如果美国对中国实施高关税政策，不仅意味着从中国进口的廉价产品会减少，而且可能会受到中国采取报复性关税的影响，从而失去中国的重要市场。它还将为世界其他国家树立榜样，并将引发更多的关税战争。中美贸易中关税的增加会影响社会就业，因为贸易意味着消费，而消费又会影响企业的生产。从总体上看，提高中美贸易关税的政策将会给中美双方带来弊大于利的结果，因此，建议制定这一政策，通过谈判和沟通来解决问题。

Tariff is a revenue charged by the sovereign state when trading the import and export commodities. It is one of the trade policies and it is a suboptimal mean to allocate the resources. Although the model of free trade is the best condition to achieve the resource allocation, there are numerous trade protection policies in the real world (Melville, 2010, p12). The situation of enhancing the tariff barrier usually happens when the domestic economy turns down. From the view of history, the tariff barriers were born in the 16th century. EU used to adopt this policy to block the import commodity from foreign countries (Lai, 2016, p5). It has great influence on both the policy-implementing country and the policy-implemented country.

In 2016, American president Trump announced to increase the tariffs on Chinese import commodities and the range for this policy may reach to 45% (Ainsworth, 2017, p4). It is believed that it will also affect greatly China and U.S in terms of trade relationship, improvement of employment, industrial structure and consumer’s benefits because the Sino-US trade plays an important role in both countries. Thus, in this condition, this paper will discuss what can be the potential effect of increasing tariffs in Sino-US trade. The potential effect can be mainly divided into two parts. One is the influence for U.S and the other one is for China. By analyzing the potential influence on their domestic economy and the effect on diplomatic relations. It will present the specific potential effect of increasing tariffs in Sino-US trade.

As for the methodologies, this paper mainly depend on the case study and desk research. By analyzing the previous Sino-US trade cases and relative literatures in this filed, it is expected to discuss the potential effect for both countries.

To answer this question, firstly it will review the literature about the tariffs and increasing tariffs. It can help to have a picture of tariff policy and its influence. Besides, this paper will also scope the previous tariff policy from both China and U.S., especially the case contains both these countries. The influences from these cases can be valuable to use for reference. At last, a conclusion will point out and summary the potential effect on this tariffs policy.

Before the presentation of further discussion, it is necessary to have a picture of Sino-US trade. It can help to understand the importance of Sino-US trade. 

In the less than 20 years of cooperation, the key link for emerging market and developed market, the bilateral trade between China and U.S. has developed to be one of the most important trade relations around the world. China is an emerging market with GDP of 11 trillion dollars and its economic scale is equal to 60% of that of U.S. But the gap in the trade scale between Sino-US is relative small with 4 trillion dollars. It means that trade as one of the way of developing economy is more important for China. In 2015, China has exported total value of commodities with 400 billion dollars to America and imported 150-billion-dollar value of goods from U.S. America is the largest export market for China, whose value of trade proportions of 18% of Chinese total amount of exports. Besides, China is the third largest export market for U.S. and purchases 10% of export commodities from America (Wang, Evans and Ballen, 2015, p6).

From 2000 to 2015, the value of trade between China and America has developed from 70 billion to approximate 600 billion dollars. The increase of 45% tariffs is evaluated to decrease 50% of amount of exports from China to U.S (Ainsworth, 2017, p5). It means that firstly, the trade of Sino-US will be stroke greatly. Among it, Chinese economy will be affected greatly because America is the largest export market for China. This influence can last for a short time and speed up the change of export policy for China. It will reduce the degree of dependency on U.S. for China because there has appeared a trend for China to transfer its export market. More than 60% of amount of exports is transferred to the non-G3 country (G3 means America, Japan and EU). China will spend its efforts to increase its export to the emerging market including India, Southeast Asia and so on to offset the negative influence from American tariffs policy. Meanwhile, it is highly possible for China to carry out the retaliatory measures because the mean of tariff war is usually to be carried out deal with this situation. In Chinese trade history, it used to put forward policy to respond the unilateral increasing tariffs. In 2001, Japanese government announced to impose respective 256%, 266% and 106% tariffs on the parts of excessing import quota of green Chinese onion, mushroom and Juncus roeamerianus. To response this policy, Chinese government imposes 100% special tariffs on car, mobile phone and air condition imported from Japan (Yoshimatsu, 2002, p17). It undoubtedly brings strike for both economy and although the income for customhouse is increased, their consumers suffer a lot from this tariffs war.

Thus, if U.S. carries out the high tariffs policy on China, it not only means the import of cheap product from China will be decreased, but also it may suffer from the retaliatory tariffs adopted by China so that U.S. may lose the important market of China. It will also set an example for other countries around the world and it will bring about more tariff war.

The increasing tariffs in Sino-American trade can affect the social employment because the trade means consumption, which is influenced to the production of corporates (Larochelle-Côté, 2007, p20). Before the discussion, it is necessary to have a picture of the trade structure of Sino-US.

The composition of trade between China and U.S. is not symmetrical. The imported good from China to U.S. mainly focus on two field. One is the electromechanical product which occupies 51% of the total value. The other one is the labor intensive and low value-added product like clothes and shoes, which proportions 33% of total import value. As for China, it imports a lot of primary commodity including agricultural products and raw ore as well as advanced manufacturing products like car and plane (Tokovenko and Koo, 2011, p8).

As the structure mentioned above, if U.S. adopts the policy of increasing tariffs on Chinese good and Chinese government put forward the retaliatory tariff, it is estimated that the following industry will be suffered a lot. Firstly, as for America, mining industry, agriculture and aircraft industry can be suffered a lot since the retaliatory tariff from China. The increasing selling price will decrease the competitiveness of these product in Chinese market. Chinese consumers may turn to their substitute goods or purchase products from the other market (Herweg and Mierendorff, 2013, p34). They can purchase raw ore from Australia or Brazil and import aircraft from EU. In this condition, the reduction of purchasing power on this industry, the employment will be decreased. But it can help little to increase the employment in field of labor intensive and low value-added industry because the American consumers can purchase such kind of products from other developing countries such as Southeast Asia and Latin America instead of American local company (Kee, Olarreaga and Silva, 2004, p23). Although compared with Chinese company, the price of products from Southeast and Latin America may be disadvantaged, it can be competitive to compete with American local company. Since the price of labor in the developing countries is relative low compared with America so that they can manufacture the low-price products.

In this way, the influence on employment on America can be negative since the increase from the labor intensive industry cannot be achieved and the reduction from the mining industry and aircraft industry is highly possible.

As for China, it will encounter greater difficulties in the policy of increasing tariffs (Cirera, Willenbockel and Lakshman, 2011, p56). Firstly, American market is its largest export market, which means there is high degree of dependency on it for China. The development of Chinese economy relays on the labor intensive industry badly. Thus, the increasing tariffs in Sino-US trade can strike the fashion industry and machine building industry in China. Since these two kinds of industry is labor intensive, it will reduce the order of export enterprise in China and they may encounter business difficulties and even go into liquidation. Then the employment of China will be reduced significantly in a short time. In other side, the retaliatory tariffs on the American mining industry and aircraft industry cannot increase the employment rate for China. Because China is limited of technology to come up with advanced aircraft. In this situation, China may turn to EU to import this product. Besides, the ore resources in China is scarce because of large number of population. So, China may turn to Australia or Brazil to purchase the mining industry.

In this condition, China cannot save its employment rate with this policy.

As we can see, if U.S. carries out the policy of increasing tariffs in Sino-US trade, it will bring negative influence on the employment of both China and America.

Although China can put forward counter measures to restrain the implementation of increasing tariffs in Sino-US trade, once this policy is carried out, China will be affected more undoubtedly because there is higher degree of dependency on this trade relation for China at present. However, this situation is changing and this potential policy can speed up this change.

By carrying out the increasing tariffs in Sino-US trade, America may aim to promote its manufacturing industry. As a top developed country in the world, its rent and labor cost is extremely high compared with the developing countries. Thus, although U.S. can eliminate one of its strong competitors, China, the following players from other developing countries like Vietnam will fulfill this gap (Thangavelu, 2013, p22). In other words, it is difficult for U.S. to promote its manufacturing industry by striking one of the various competitors and its industrial structure will maintain existing condition, which is mainly consisted of high-tech industry, financial industry and service industry.

In terms of industrial structure adjustment, China will suffer a lot in the short time but may get benefits in the long run.

Although the imported products from China to U.S. are mainly about the labor intensive and low value-added products, this situation is changing and the added value of products from China has increased a lot compared with 10 years ago. During 2000 to 2016, the proportion of export product in field of electromechanical industry and transportation facilities has increased from 47% to 33%. Meanwhile, the proportion of labor intensive products like toy and shoes has declined from 35% to 27%. In other words, 10 years ago, the trade deficit between China and U.S. is mainly caused by the labor intensive products. But now the trade deficit is mainly contributed by the capital goods (Xing, 2017, p1).

The trend of adjustment in the industrial structure in China has developed. The policy of increasing tariffs in Sino-US trade will speed up this trend. Firstly, it is increasing tariffs will undoubtedly strike the labor intensive manufacturing industry, which can help to reallocate the resources in China and stimulate it to develop high-end manufacturing industry. President Trump has expressed his idea to set up the trade barriers. However, it also needs convincing reason to put forward it. The carbon tariffs can be the most possible reason to put forward this policy of increasing tariffs. This idea has appeared in Obama administration (Zhang, 2010, p31). Take this for an example, it will affect Chinese industrial structure.

At present, in Chinese industrial structure, especially its export structure, the high-polluting, high-consuming and low-technological industries occupy the main position. The carbon tariffs will be declined the proportion of products which cannot meet the standards of American environmental requirement. Instead, the proportion of low-carbon and green products will increase, which compel China to develop the capital intensive and technology intensive industry from the resource intensive, energy intensive and labor intensive industry. However, the industrial restructuring usually lasts for a long time and it is difficult to predict whether it can achieve success or not. The previous projects like the wind energy industry and solar energy industry are both carried out based on the international collaboration (Hu, Wang, Byrne and Kurdgelashvili, 2013, p7). It should be based on the healthy relationship among inter-government because the complementary advantage can help to increase the success rate for this energy project. Once the deterioration of Sino-US relations happens and maintains for a time. It goes against the collaboration carried out between China and U.S. What’s more, it may also affect the other aspect of international connection.

As analysis presented above, the policy of increasing tariffs in Sino-US trade will affect greater on China in terms of adjustment of industrial structure. But the adjustment of industrial structure can last for a long run. Besides, the tariff war may also bring harm to carry out the international collaboration.

The increasing tariffs in Sino-US trade will be undertook by consumers ultimately because the tariffs is added to the price of free trade and as one kind of indirect tax will increase the consumers’ burden (Lambrecht, Seim and Skiera, 2007, p26).

Huge price difference of parts of commodities is considered as the cause of outflow of consumption. Increasing the tariffs can enhance the price of imported goods so that it can eliminate the price difference between the imported goods and local goods. In this case, if the policy of increasing tariffs in Sino-US trade is carried out, the purchasing cost of purchasing imported products for both Chinese and American consumers will be increased. In other words, before the policy put forward, consumers can buy a certain imported product in a low price, now he has to pay more for the tariffs added or he gives up to buy this kind of products to select the suboptimal products to meet his demand. Both conditions mean that his benefits will be hurt under this policy. One more choice for consumer to purchase the low-price product as before is tourism shopping, which will increase the time cost for consumers.

This policy can affect consumers from both China and U.S. But it is estimated that the American consumers will be affected deeper. Because the imported products from China are mainly articles of daily use, which is consumed by the public. Thus, the increasing tariffs will enhance most American people’s living cost even though they can turn to other products from other developing countries. But these products still increase the living cost for American people.

In this terms, the public from China may not be affected a lot because the imported products from U.S. are mainly the raw ore and aircraft, which is purchased by corporates. So, the Chinese companies may suffer from the high cost of purchasing materials and advanced device. Its production cost will also be conveyed to the terminal consumers. But the transmitting procedure is longer than that in U.S. It will bring more time for China to adjust the condition and come up with coping strategy to eliminate this terrible situation. However, as for U.S., the time for adaption and adjustment will be shorter and it will affect the social public greater.

As for government, because of the increasing income of tariffs, its fiscal revenue will be enhanced in a short time. However, in the long run, it is uncertain because the main source of fiscal revenue for a country is from individual and corporate income tax. Thus, in a long run, the comprehensive national strength will genuinely the fiscal revenue.

As the analysis presented above, the potential effect of increasing tariffs in Sino-US trade can be concluded into four parts.

Firstly, it will strike the Sino-US trade. The increasing tariffs will block the development of trade relation between China and U.S. The unilateral increasing tariffs on Chinese imported products will come about the retaliatory tariffs from China. Thus, it will lead to tariff war between China and U.S. and it will undoubtedly decline the value of trade of Sino-US trade since the increasing tariffs will be added to the price of imported product price, which will eliminate the product superiority for both countries.

Secondly, this policy cannot help to improve the employment situation for both China and U.S. Although the increasing tariffs on Chinese products can eliminate their competiveness, U.S. still has to face other players with advantages of low labor cost and rent from other developing countries like Southeast countries. As for China, the policy of increasing tariffs can strike Chinese export enterprises and even make them to go into bankrupt. Thus, in the short term, the unemployment rate for China may be increased.

Thirdly, the increasing tariffs in Sino-US trade can also affect the adjustment of industrial structure for both countries especially China. The statement mentioned above has pointed out that even though U.S. can beat down Chinese labor intensive companies in the manufacturing field, it still cannot promote its traditional manufacturing because compared with other developing countries it still stand in the disadvantaged position. However, it will speed up the adjustment of industrial structure for China. Because the trend of upgrading industrial has appeared in China and the tariffs can help to weed out the lagged industry especially the high-polluting industry.

Fourthly, this policy of increasing tariffs will decline the consumer’s benefits since the increasing tariffs will be added to the product price ultimately. But the level of damage for consumers in China and U.S. is different. It is believed that American people will encounter more difficulties and there is less time for adaption and adjustment because of the difference of import and export structure of products from China and U.S. In terms of government, its fiscal revenue will be increased in a short time because the import tax will be increased.

As overall consideration, the policy of increasing tariffs in Sino-US trade will bring out an outcome which is more harm than good on both China and U.S. Thus, it is suggested to lay up this policy and solve problems by negotiation and communication.

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