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Trade Disputes Escalating Between China And The U.S.

China says pork products will face a 25 percent duty, which has some Hoosier pork farmers worried. (Flickr: Laura Bernhardt)

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Trade disputes between China and the U.S. are escalating as the two countries continue to place tariffs on one another with matching intensity.

China announced Wednesday they would be placing new tariffs on roughly $50 billion in U.S. imports including aircraft, automobiles, and soybeans.

The response comes after the Trump administration published a list Tuesday of 1,300 Chinese imports that would face a 25 percent tariff, also totaling $50 billion.

Last month the Trump administration announced tariffs on Chinese steel and aluminum, to which China responded with tariffs on $3 billion worth of U.S. fruits, steel pipes, pork products, and other imports.

Some experts worry of a burgeoning trade war between the two economic superpowers as tensions increase.

This week on Noon Edition, our panelists discussed the trade dispute between the US and China and how these tariffs affect Hoosiers.

Guests:

Mostafa Beshkar: Assistant Professor of Economics, Indiana University, Bloomington, IN

Farzad Taheripour: Research Associate Professor of Agricultural Economics, Purdue University, West Lafayette, IN

Doris Anne Sadler: President of World Trade Center Indianapolis, Indianapolis, IN

Conversation: Trade Disputes Escalating Between China And The U.S.

Economists like Indiana University Assistant Professor Mostafa Beshkar say these threats of tariffs do not constitute a trade war.

“By definition, trade war is a situation where countries do not cooperate on trade rules and they try to set policies that benefit themselves without any regard to the welfare of foreign countries. There is definitely a threat of trade war,” Beshkar says.

The uncertainty of these tariffs not only affect large markets, but they also affect smaller mid-size companies including those in Indiana.

Doris Anne Sadler is president of the World Trade Center Indianapolis, which has trade relations with other World Trade Centers in China. She says this hurts companies looking to expand into the global market.

“They are not going to be able to expand in the way they perhaps would have. They will not hire the extra 10 employees that are needed in these small and mid-size companies to ramp up their international operations,” Sadler says. “And that has a trickle down effect. It’s not just that particular business, it’s everyone around it.”

China’s possible tariffs not only hurt the U.S. economy, but they also have a targeted political effect on President Trump. The United States is the largest exporter of soybeans in the world and they now may face a 25 percent tariff.

“This means that President Trump may lose some of the support he got from farmers from the Midwest,” Purdue agriculture economist Farzad Taheripour says. “If U.S. farmers lose their income, if they cannot sell their product at the price they wish for, this means that it has major consequences for President Trump.”

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