Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said: “Through the increased tariffs on Chinese goods, US hoped to reduce the trade deficit with China, transfer costs to Chinese exporters, and force companies to move their supply chain activities out of China to the US or other countries.
“But such expectations have failed, while the tariff surges have damaged US companies’ competence, dragged down US economic development, and hurt US people due to consequently higher product prices and fewer jobs.”
The US trade deficit with China has increased, and US companies are bearing the brunt of elevated tariffs on Chinese goods, Tu said, citing a recent report by rating agency Moody’s Investors Service.
At the same time, US consumers have to pay more for Chinese goods such as clothes, electronic products and furniture, due to the lack of better or cheaper alternatives, while increased tariffs on Chinese intermediate products have increased US companies’ production costs and hurt their competence, Tu said. This also resulted in higher inflation and fewer jobs, he added.
“China overtook the US as the world’s top destination for foreign direct investment flows last year, which showed that attempts to force supply chain activities out of China are in vain,” Tu said.