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The China Tariff Mess

The cost to US consumers and firms imposed by tariffs on Chinese imports is not large relative to the gain that would be achieved if the US succeeds in persuading China to stop illegally taking US firms’ technology. But the Trump administration should state that this is the goal, and that the tariffs will be removed when it is met.

CAMBRIDGE – The most frequent questions that I get when I speak to non-economists concern the tariffs that the United States is levying on imports from China. Why is President Donald Trump’s administration doing this? Aren’t the tariffs a tax on the goods purchased by American consumers? Why does Trump think the US can “win” a trade war with China? How do the Chinese respond to the current tariffs and threats of more? And so on.

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