Many trade experts and the governor of Arkansas are among those criticizing President Donald Trump for his decision to escalate the ongoing trade tensions with China by implementing more tariffs.
Analysts say the trade deficit is one-sided and additional tariffs aren't solving anything.
“America is basically a deficit country,” Yukon Huang, a senior associate of the Asia Program at the Carnegie Endowment for International Peace said. “Households don’t save very much. The government runs large budget deficits, and that means it will have a trade deficit. That explains why America has had trade deficit every year for 40 straight years.”
Trade deficits are turned by increasing the rate of saving, not because of China or the economy at large, he concluded.
US farmers are already feeling the pain. Arkansas is a major agricultural state and, last year, farmers there harvested 1.4 million hectares of soybeans. The state's soybean exports to China once reached 800 million US dollars per year, and now the governor is worried.
"We are feeling the impact already in terms of price," said Asa Hutchinson, governor of Arkansas. “We are hurt both by the tariffs that we imposed but also the tariffs that come back in retaliatory fashion.”
American businesses could take a hit, and so could Trump's own political ambitions. Business and media leaders say American consumers could be hurt, and Trump is also facing massive pressure from the upcoming mid-term elections in November.
"Nobody knows what can come out of a trade war. The outcomes are normally bad," said Jim Press, former president of Toyota Motor North America, noting it will not help American consumers and workers.
