China-US Trade War and its Damage to the US Economy
Reportedly the United States’ long-term unemployment rose to an alarming level. According to US politicians, the pandemic-hit economy has stalled. This is compelling the Biden administration to review the unreasonable trade and tech war against China. The trade war between the two countries is having a damaging effect on the US economy.
The extreme challenge to the COVID-hit US economy was enhanced by the decreased level of hiring. A member of the Council of Economic Advisers, Heather Boushey warned that the job numbers showed an economy that was stalling.
Joe Biden referred to the $1.9 trillion stimulus plan as a means to counter the weak employment data. The plan aims to help individuals and businesses hit by the impacts of the pandemic.
According to Chinese experts, such measures were just temporary. For a long term cure to the current predicament, the US administration would have to reevaluate its trade war with China.
It is uncertain whether the current US economic condition is more due to its trade war with China or the pandemic. Nonetheless, undoubtedly the trade war and suppression of technology firms of China has damaged the US economy.
US saw an overall trade deficit of $678.7 billion in 2020 as reported by the US Commerce Department. To add to the suffering, the US tariffs imposed on Chinese companies are being paid by its own consumers and companies. The effects are worse amidst the pandemic as an increasing number of US companies went bankrupt and families saw decreased incomes.
As a result of the tariffs, US consumers faced an income loss of about $16.8 billion in 2018 as reported by Bloomberg.
Qualcomm, a US chipmaker reported that owing to Trump’s bar on-chip supplies to Chinese companies, its earnings slightly missed expectations of $8.27Billion.
A professor at Pekin University noted that before this ban, around 65% of global chipsets had been sold to the Chinese organizations. And a large part of this was purchased by US manufacturers.
Recent business reports suggest that the trade war between the two countries has caused a loss of 245,000 US jobs.
Last week it was announced that Biden’s administration would review the China-US phase one trade deal signed at the start of 2020. Some western media reported that however, China missed the desired purchase goal that year.
Data from the Department of Agriculture, US showed that the country had exported $28.75 billion in agricultural goods and associated products to China. This missed the target goal of $36.5 billion that was to be achieved under the phase one trade deal.
However, Chinese experts believe that blaming China for the shortcomings is baseless. According to them in fact, the US agricultural producers recognized China’s efforts during the difficulty caused by the global pandemic.
While there are varying theories to the troubled US economy, it remains to be seen how the Biden administration repairs it.