US tariff addiction: a cause of concern to global economy

Coming out of American's pockets

The US government has repeatedly claimed that the tariff measures will profit the United States, but few around the world agree.

It is not in the interest of either US consumers or Chinese workers "to have this endless escalation of trade conflict," Jason Isaacson, chief policy and political affairs officer at the American Jewish Committee, told Xinhua.

To silver-haired Iowa farmer Rick Kimberley, "it's a slow-burn, it's affecting us slowly. I mean it's affecting our income."

Kimberley's hunch was right. According to US newspaper the Star Tribune, a total of 84 farms in US Upper Midwest region filed for bankruptcy between July 2017 and June 2018, doubling the number in 2013 and 2014, partly due to raging trade disputes.

"Tariffs are taxes that American businesses and consumers pay," stated a letter sent to Washington a month ago by a coalition named Americans for Free Trade, bearing 151 signatures of a wide range of business associations.

In a report released on May 11, Goldman Sachs revised up its estimate of the tariffs' impact on US core personal consumption expenditures. "The costs of the tariffs have fallen entirely on US businesses and households."

Economists at Moody's Analytics also found that US-China trade disputes would slash US real gross domestic product (GDP) by 2.6 percentage points and cost the economy 3 million jobs by the final quarter of 2020.

A February report by economic consulting firm Trade Partnership Worldwide found that an average US family of four would pay $2,300 more in goods and services each year should Washington impose an additional 25-percent tariffs on all goods from China.

In three years, while 334,900 workers will gain jobs as a result of the tariffs against China, around 2.5 million workers will lose jobs, seven for every job gained. The tariffs will cost the US economy more than $5.5 million for every job gained, it said.

"The people who are paying tariffs are (in fact) US citizens ... It's coming out of their pockets," said Gilad Alper, head of research at Israel's Excellence Nessuah Trust Company.