USA Trade War HURTING China Economy

If you listen to the media, they would say the trade war with China would hurt the USA economy. This would be the narrative from every media outlet. Let me enlighten you. It is a complete myth. I blame part on the Trump administration and the media. Tweets aren’t enough. Explanation on facts are lacking. Because no one could articulate an answer, the media shaped, persuaded, lied, and manipulated the narrative; thus, causing massive confusion.

I would agree that we are in a world wide economic recession. It is the consequences being part of a world wide global economy. Every country has a responsibility to boost its own economy. Each country sells goods and services to other counties. However, when government interacts with businesses it can cause havoc to the overall health to the global economy. When government interference prevent a business to have their goods and services to be bought and sold, it affects everybody. For example, when government forces a business with new regulations and increase taxes, it hampers productivity and growth. When a government manipulates or devalues its currency, it makes selling goods and services to other counties cheaper, but buying from other countries difficult.

This is what we are experiencing with China and the trade war with them. Before Trump took office, America had the highest corporate tax in the world. It caused many businesses to flee to counties with a lower tax rate. This cause loss in jobs in America. Because American dollars is the global currency and all world currencies are pegged to the US dollar, it allowed other counties to deflate or devalue their currency to make their goods and services affordable for US to buy them at a very cheap rate. For a prolonged period, China had manipulated their currency to the point to cause a huge trade deficit with USA. In the long term, these trade deficit will affect the overall US economy and GDP. Trump saw this. When Trump took office he immediately slashed the corporate tax rate  making us comparable to other counties, which made us competitive. The result brought businesses and jobs back to America. Next he wanted to narrow the trade deficit with China. If we made China as the world supplier to the global economy, every country would be under the mercy of China.

It’s not a secret that China wants to be a superpower. They give billions of dollars to poor counties with the stipulation if these naive counties are unable to pay, China would take ownership of their  businesses. Even though China has been buying massive amounts of US treasuries, Trump didn’t want America to become a slave to China through unfair trade practices. By leveling the playing field, a fairer, prosperous relationship with China could be seen.

People had asked me that these tariffs on Chinese goods was not bringing revenue to America. They said Trump was wrong to say China was paying the tariffs. Similar to the statement that Mexico will pay for the border wall, I could understand why they didn’t  believe in Trumps comment. I seen the videos Trump claiming that the US was raking in millions and billions of dollars from China on these taxes (tariffs) on Chinese goods, but Trump never explained how.  I was pointed out by these naive conservatives that businesses would pay these tariffs and pass the cost to the customer.

Here was my response. I blame Trump and the mainstream media for not articulating how US are benefiting from these tariffs. Yes, it is correct to say when goods come to the USA, businesses would pay a fee and any taxes (tariffs) on these goods coming from abroad. However, a business has a choice if they want to buy those goods. In regards to China, if a Chinese business wants American business to buy their goods, these Chinese business would pay or subsidized these taxes from their own pocket. It becomes a rebate or a voucher for the American business buying Chinese goods. Thus, the American business doesn’t pay the tariffs because China needs to sell their goods to feed the consumerism in America. Likewise, a Chinese business may offset these tariffs by selling their goods at a discount. Either way, America gets the better end of the deal. This supports Trumps claim that China is paying the USA tariffs imposed on them. Also, this trade war has made other counties competitive for their goods and services. America businesses are able to spend wisely and not be a slave for Chinese products.

It been a year since this trade war with China and their economy is hurting. You don’t see much of it being reported by the mainstream media because anything that Trump does good, it doesn’t get reported.

As long as the US economy is strong with low unemployment, increase in job wages, and a resilient market, let’s continue with the trade war with China. Sooner or later, China will bow to America and create an environment where two counties could live a fairer, symbolic relationship with one another.


USA Trade War HURTING China Economy