Trump suggests 60% tariff increase against China if elected

As the US election season kicks off, Donald Trump has made headlines by threatening to restart his trade war against China.

The controversial candidate, who seems guaranteed to win the Republican nomination, told supporters at a recent rally that he would consider imposing punishing tariffs of up to 60% on Chinese goods at a time when the East Asian power is struggling to keep up its stellar record of economic growth.

A hostile trade environment is the last thing that Beijing needs as it wrestles with public dissatisfaction over the economy and continues to promise a reintegration of Taiwan by force.

Trump's latest comments, which come just days after his victory in the New Hampshire primary, have sparked criticism from his political rivals at home and abroad - but could his controversial plan to punish China in the trade arena be exactly what his supporters want to hear?

Trump stokes old fears of China to portray an image of strength

Since he first started running for office ahead of the 2016 election, Donald Trump has painted China as a major villain in the world trade arena. Using the Chinese trade surplus with America as evidence of Beijing’s plot to take American jobs and undercut US companies in global business, the former president initiated the cycle of major trade tariffs between the United States and China which soon spiraled into all our trade war.

Predictably, Trump was always sure to paint himself as the strong defender of American interests throughout the trade war - and he looks set to do it again.

• While his voter base has traditionally been enthusiastic about the prospect of punishing China economically, in reality the US consumer has borne a considerable amount of price increases as a result of rising tariffs.
• Higher prices on imported Chinese goods cost US consumers $51 billion annually, according to data from the American Action Forum. Trump’s suggestion of a 60% tariff could see this number double or even triple.
• At a time when US inflation is just coming off record highs, the prospect of higher tariffs could mean lower affordability and less money in the pockets of consumers.

However, these practical considerations may not be enough to persuade voters to abandon Trump at the polls.

Trump currently leads Biden by 45% to 41%, an impressive showing for a candidate still facing criminal charges. As excitement over the election grows in the US and internationally, punters are taking the opportunity to bet on presidential elections at Bovada, choosing between Trump (+260) and Biden (+450) before the field narrows even further.

Trump's proposed trade war comes at a low point for US-China relations

No two countries ever want to engage in a trade war, and in the case of the United States in China an escalation in economic and military tensions couldn't come at a worse time.

When Trump began his first trade war against China in 2018, Prime Minister Xi was presiding over a strong economy with a growth rate of almost 7%. Five years later, the Chinese economy is in significantly worse shape with high youth unemployment and subdued growth predicted for the foreseeable future.

By contrast, the United States has weathered the current period of inflation with a relatively robust economy and low unemployment. The proposed tariffs would have the potential to do significant harm to China's export earnings at a time when the world's second-biggest economy is struggling, and its government is embarking on an aggressive foreign military policy.

China has long contended that it has full claim to the territory of Taiwan, despite the citizens of that country vehemently rejecting the idea. Tensions in the region are rising, yet Trump has refused to pledge his support for Taiwan as he prepares to face off against China at the negotiating table.

Trump may feel that he has Beijing at a disadvantage economically as he plans to extend the existing tariffs, which not even the Biden administration has reduced to date. But initiating a new trade war with China could have a devastating effect on the people of Taiwan.

The island nation currently controls 68% of the global semiconductor market and plays a pivotal role in the global electronics industry. A war with China has the potential to seriously disrupt world trade - a situation that Trump could push into a full-blown crisis with his tariff plan.

Final thoughts

Donald Trump’s controversial plan to raise tariffs on Chinese imports by 60% may resonate well with the conservative voter base. However, should this policy ever see the light of day it could send the world economy into a downward spiral.

China’s current economic weakness and ongoing attempts to claim Taiwan as a dependent territory have placed a significant strain on relations between Beijing and Washington.

As Trump seeks to intimidate his counterpart at the negotiating table, he may trigger an economic and military confrontation that could have implications beyond America’s borders.

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