As the November presidential election approaches, American businesses are bracing for potential tariff increases on certain foreign-made goods, irrespective of the election outcome. Former President Donald Trump, known for his stance as a 'Tariff Man,' has advocated for raising tariffs on all imports. On the other hand, President Joe Biden, who has largely maintained Trump's tariffs, recently announced plans to escalate tariffs on specific Chinese-produced items like electric vehicles, semiconductors, and steel.
Despite their differing stances on various issues, both candidates converge on a protectionist trade policy. While tariffs can garner political favor, economists caution that they may not always deliver the promised benefits to domestic industries and can be costly.
Trump initiated tariffs in 2018 on a range of foreign-made products, including washing machines, solar panels, steel, aluminum, and numerous Chinese goods like hats, luggage, bicycles, TVs, and sneakers. If re-elected, Trump intends to expand these tariffs significantly, proposing duties of at least 10% on all imports from all countries, up to 60% on Chinese imports, and a 100% tariff on foreign-made cars.
Studies indicate that Trump's tariffs did not substantially boost US manufacturing and may have resulted in a net loss of jobs. Importers in the US have borne the brunt of these tariffs, with costs amounting to billions of dollars. Trump's tariff strategy towards China aimed to pressure Beijing into addressing trade imbalances and unfair practices, although some commitments made by China were not fulfilled.
Contrary to Trump's broad tariff approach, Biden's recent tariff announcements target China specifically. The Biden administration plans to increase existing tariffs on various Chinese products, including steel, aluminum, semiconductors, electric vehicles, and medical items like syringes and needles. These measures align with Biden's broader economic agenda to bolster domestic manufacturing, particularly in clean energy and semiconductor sectors.
While the steel and aluminum industries have welcomed Biden's tariff adjustments, some analysts question the impact on the US steel sector due to China's relatively minor share of US steel imports. Pressure from lawmakers and industry stakeholders has influenced Biden's decision to maintain or heighten tariffs on Chinese goods to counter unfair trade practices.
