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January 18, 2021

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US to ‘gain’ by reducing tariffs

REDUCING tariffs on China by even a “moderate” amount would benefit the US economy, according to a study by a business council and an economics firm.

The report comes as the United States awaits the inauguration of President-elect Joe Biden on Wednesday, who is expected to detail his trade policy the following day. Even merely relaxing the tariffs imposed during the trade war would help the US economy, which is going through a rocky recovery amid the coronavirus pandemic, according to the report from the US-China Business Council representing 200 firms operating in the Asian country, and Oxford Economics.

If “both governments gradually scale back average tariff rates to around 12 percent (compared with around 19 percent now), the US economy produces an additional US$160 billion in real GDP over the next five years and employs an additional 145,000 people by 2025,” the report said.

Increased employment and earnings as well as lower prices would also push up income by about US$460 per household. But if Washington were to separate its markets from China, the US economy would “produce US$1.6 trillion less in real GDP terms over the next five years... (resulting) in 732,000 fewer jobs in 2022 and 320,000 fewer jobs in 2025,” according to the report.


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