U.S.-China Tariff War: Discussion Questions from FASH455

#1 President Trump has been proposing many tariffs on imports from foreign countries such as China. Do you think that these high tariffs will actually drive more production into North American manufacturers and promote the US economy, or will it hurt the U.S. and inflate the costs of U.S. production? Why?

#2 In class we discussed that trade creates winners and losers. So will President Trump’s high tariffs create winners and losers too? Who are they? Also, why should or should not government use trade policy to pick up winners and losers in international trade?

#3 What are some possible solutions to the trade deficit between the United States and China other than high tariffs? Why or why not trade deficit is a problem to worry about?

#4 If Trump is able to impose more tariffs and even the playing field with China, will a new “China” arise from a rivaling country, which can continue to pressure US manufacturers? Why?

#5 Why does Columbia refuse to bring production to the US, as Trump would like?

#6 Columbia has been designing products to specifically get around the tariffs set by President Trump which creates trade loopholes for their company. Do you think that it is ethical for them to do this? Why or why not?

#7 If President Trump keeps raising tariffs and wants goods to be made domestically, how will other countries respond to this with all of their excess goods?

#8 Why would President Trump continue to advocate and push for this tariff even if an overwhelming amount if businesses are hurt by it, finding ways around it, or getting excused from its implications? Do the pros outweigh the cons?

[For FASH455: 1) Please mention the question number in your comments; 2) Please address at least TWO questions in your comments]

Author: Sheng Lu

Professor @ University of Delaware

16 thoughts on “U.S.-China Tariff War: Discussion Questions from FASH455”

  1. #1. I do not think that these tariffs will drive more production into the US. We saw from the readings that companies are unable to afford to pay these China tariffs, and outsource production to other countries instead. Other companies face bankruptcy and going out of business. It seems as though only the most successful businesses will stay afloat, which does not promote a good domestic economy.

    #3. A possible solution to this trade deficit in the face of these tariffs could be to research production methods used in Chinese factories and find ways to incorporate them into domestic production. Although we do not have the technology or manpower that compares to China, we do have innovative thinkers and can learn to specialize manufacturing.

    1. I agree with your #1. I think that these tariffs will certainly not drive more production into the US because companies do not want to and can not spend the amount that it would cost for them to manufacture in the US. Take Columbia for example, their chief executive said “that there was nothing the president could do to entice the company to make its products in the United States,” and I think that would be the case for many other companies.

      1. Later on, we will discuss the state of US textile and apparel manufacturing. My recent study shows that apparel “Made in the USA” is still relevant today. However, it does not seem that “made in the USA” and imported apparel necessarily compete with each other today: https://shenglufashion.com/2019/01/28/demystify-themade-in-the-usa-apparel-sourcing-strategy/
        As a matter of fact, imports support “made in USA”–https://shenglufashion.com/2016/05/17/international-trade-supports-textile-and-apparel-made-in-usa/

    2. I agree with both of your answers. For #1, I also believe that with these tariffs being enacted, only the most successful businesses will survive. The cost of producing domestically will greatly increase the final cost of goods, only deterring consumers from purchasing.

      For #3, your proposed solution of researching Chinese production methods is a good idea, but I agree that we do not have the same advancement, expertise, and technology to match China. I think that the US can definitely take advisement from China’s methods to slowly begin to increase domestic manufacturing, but that it will take a great deal of time and infrastructure reevaluation to be able to compete with China.

  2. #2. Companies that are manufacturing in the US and not overseas will generally benefit from the tariff due to the potential for prices on goods imported from China increasing and therefore allowing them to be able to compete with prices. On the other hand, companies that produce exclusively or mostly overseas will have to make a lot of adjustments just to stay in business, the could lose their customers or business.
    #7. Columbia refuses to bring their manufacturing to the US because they are creating more and at a lower price overseas. They are able to spend less and sell more by producing overseas and that works with their business model and allows them to turn a profit, they would not risk losing that.

    1. I agree, and think that Columbia is outsourcing its labor not only to avoid tariffs, but to also save their customers from higher prices.

  3. 3. What are some possible solutions to the trade deficit between the U.S. and China other than high tariffs? Why is the trade deficit a problem to be worried about?
    The United States needs to combat the trade deficit with China in some way and soon. The deficit is something that must be of concern right now because it is affecting the economic and social aspects of life in our country. The substantial loss of domestic manufacturing obviously affects the amount of exports the U.S. can have, as well as job opportunities for Americans. The U.S. should push for manufacturing done within the country by reforming the way it has been done in the past, which has since become inefficient in comparison to China. A reformation in domestic manufacturing must be different than the manufacturing done in China, so that exports from the U.S. are of better value than Chinese exports. For example, the U.S. might be able to figure out how to manufacture textiles in a more sustainable way than China. This would be of value to apparel companies who are striving to be “greener” and would replace imported Chinese textiles with those manufactured in an eco-friendly way.

    4. If Trump is able to impose more tariffs and even the playing field with China, will a new “China” arise from a rivaling country, which can continue to pressure US manufacturers? Why?
    India is a rising force within the textile and apparel industry, in regards to manufacturing and exporting. India may be able to take advantage of the tariff pressure on China, by becoming the next lead exporter, specifically in textile and apparel products. More tariffs on China and less on India will allow for the country to export competitively to the United States.

    1. I agree with your idea in #4. I think other textile and apparel manufacturing countries will take advantage of the tariff, especially since some of them already do business with the United States. I also think it is possible that China will do its best to maintain its business with the U.S. because of the amount capital that they are currently making, so it might try to find a way around the tariffs, like re-locating their factories or outsourcing some of the labor.

  4. 5. Columbia refuses to bring production to the US because for one, the costs would be much higher. One of the major reasons that companies choose to manufacture overseas and outside the US is because the labor is cheap. The other reason Columbia refuses to bring production to the US is because they believe that the US does not have the same expertise for apparel manufacturing as these other countries do, therefore, they do not want to compromise their production by bringing it into the US.

    6. When I first read about Columbia’s product engineering and design to get around the tariffs that were set by President Trump, I thought this was genius. It never crossed my mind that this could be unethical, however, I would understand why one might frown upon it. On the other hand, I believe this is a really smart idea, and I think that Columbia is doing it to not only save themselves, but to also save their customers from increasing apparel prices.

  5. #3 The trade deficit is a problem that the United States should be trying to solve because we are so reliant on China but they do not import nearly as much from us. If the U.S. and China were ever unable to trade, the U.S. would have to rapidly find another place to manufacture goods, which both companies and consumers would feel. However, China would not be as heavily impacted since they do not depend on the U.S. as much. One possible solution to the trade deficit would be to research what China is importing for other countries to determine if they are goods the U.S. could manufacture and export to China. Another potential solution would be to see if there is a service that China could use that the U.S. could invent and sell to them, whether it be technology or something that a business would do. For example, China has pollution problems and many businesses in the U.S. are striving to become more environmentally friendly. Perhaps U.S. representatives from those places of business can teach factory owners in China certain strategies and practices that they can employ to reduce pollution in Chinese factories.

    #7 It is difficult to predict other countries responses to President Trump’s increases in tariffs and desire for domestically produced goods. It depends on the amount the country imports and exports to other countries, especially the United States, as well as their leaders and citizens views on globalization. So, a country that relies on the U.S. for manufacturing orders might view it as an attack or commentary on their production methods and the quality of the goods they produce. They might be hesitant to engage in trade in the U.S. in the future and share their goods with the U.S. Or perhaps the other countries will find loopholes in the tariffs to continue to manufacture goods for the U.S. because companies want to spend the least and make the most and the manufacturing companies also want to make as much money as possible. However, a country that also wants to bring back the return of domestic manufacturing, might view it as “if they can do it, why can’t we?”

  6. 3) A possible solution to correct the trade deficit could be for the United States to decrease and regulate the amount of products they are importing from China. By importing smaller quantities of goods from China, the trade deficit will decrease over time. It is not desirable to have a trade deficit because it is not good to be so reliant on other countries for goods. If we are too dependent on another country for goods, they will have too much power over us.

    6) It is not ethical for countries to be creating products that avoid Trumps new tariffs. Each country is entitled to their own trade laws and regulations. If one person is going to find loopholes, there is nothing stopping everybody from finding a loophole and cheating the law.

  7. #5 Why does Columbia refuse to bring production to the US, as Trump would like?

    Columbia refuses to bring their production back to the US because cheaper production, better manufacturing, more resources, and many skilled workers are located outside of the US. The reading article highlighted the fact that since a great deal of manufacturing and sourcing for US companies has been done outside of the US for some time now, there is a lack of workers able to perform these tasks within the US. Manufacturing is done more efficiently and cheaper outside of the US, benefitting the company. In addition, the article mentioned that manufacturing expertise has moved overseas, so if Columbia were to manufacture in the US, the goods may not be of the same quality and fit.

    #6 Columbia has been designing products to specifically get around the tariffs set by President Trump which creates trade loopholes for their company. Do you think that it is ethical for them to do this? Why or why not?

    I personally believe that so long as the company is not explicitly breaking any laws or regulations, the practice of finding loopholes to avoid tariffs is ethical. If the company is adhering to all rules they must follow that are laid out in trade agreements, their operations are not wrong. I could see how their avoidance of tariffs could be seen as unethical, but if the products are engineered correctly and to the proper standards, and they are paying all applicable tariffs, I see no issue.

  8. #1: I do not believe that increasing tariffs on imports will drive higher production to the United States. I believe many companies will seek alternative places, such as Bangladesh for production. Many US citizens are not willing to perform this high labor intensive job for what the wages are. Also, the tariffs on imports have been relatively high and companies still make the decision to produce outside the US.

    #4: There is a high possibility that a ‘new China’ will arise if Trump is able to impose higher tariffs. There are many developing countries in terms of exporting apparel. These include India, Vietnam, and Bangladesh. I believe companies will turn to these countries for production because they are seeking cheap production so that they do not need to raise the end price on the goods for the consumers.

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