US-China trade: The forgotten shall be forgotten no more

Wilbur Ross, American Commerce Secretary on Wednesday stated that China is the most serious trade protectionist country. China is doing well in talking about free trade than actually doing it.

Ross restated the importance of American trade terms. Countries will be heavily charged for tariff if violating those trade terms. Iron and steel aluminum products will be the first focus.

He is in support of using tariff as a method to adjust international trade towards better terms for America. He supports international trade, but not if such trades trade impact American employment and manufacturing industry.

I believe the Trump’s narrative is slowly shifting from “We will punish American companies which produce in China and re-import into the US” to “We will punish all Chinese exporters, no matter who their shareholders are, if this has negative effect on our domestic industry”

When dealing with trade and protectionism issues, a country is always trying to find a balance between protecting the interest of producers’ vs protecting the interest of consumers’. But things get more complicated when policy makers need to find a compromise between making a country better off on average vs making everyone better off..in the absence of proper internal transfer mechanisms, open trade that makes a country better off on average may widen income disparities and standard of living. It is the natural that Trump, apparently elected by the bottom 99%, needs to sacrifice the average in exchange for lifting those at the bottom. Remember “The forgotten shall be forgotten no more.”


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