Analysis: Biden's tariffs against China may not affect global commerce at all.
The United States is imposing higher tariffs on many Chinese goods. A new study suggests that these increased duties will have minimal effect on international commerce and European trade. The tariffs will mainly impact products and industries that are already burdened with duties.
The Kiel Institute for the World Economy (IfW) predicts that the US tariffs on Chinese items won't have a significant impact on global trade or European commerce. The institute's simulations demonstrate that the imposed tariffs will trigger only small adjustments in trade, which are insignificant in proportion to the total.
On Tuesday, the US declared a significant hike in tariffs on various Chinese items. These products include electric cars, semiconductors, minerals, and medical products. To give an example, the tariff on Chinese electric cars will vastly rise from 25% to a breathtaking 100%.
Yet, IfW's findings indicate that these heightened tariffs won't affect world trade or European business. The researcher believes that other nations, particularly Canada and Mexico, will take on the lost imports. However, the possibility of a series of reactions and counter-responses is concerning.
The US government's actions are driven predominantly by domestic politics. The EU is China's major client for electric vehicles, granting it negotiation power.
"The Commission must not be passive and indifferent to Beijing's subsidy policy, but it should also not become an instrument of the US," highlighted Julian Hinz, a trade researcher at the IfW. First and foremost, the Commission should uphold its anti-subsidy process. The overall set of new tariffs entails a 3% cutback in US imports from China, according to the IfW. The tariffs are likely to mostly target industries that have been subjected to import taxes in the recent past. The semiconductor sector is particularly notable. The institute also foresees "almost no effect."
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Joe Biden's tariffs against China, as analyzed in the Kiel Institute for the World Economy's study, are expected to have minimal impact on global trade and European commerce, with only small adjustments in trade being observed. Despite the US raising tariffs on numerous Chinese products, including electric cars, semiconductors, minerals, and medical products, the institute predicts that other nations like Canada and Mexico will take on the lost imports.
Source: www.ntv.de
