It sure smells like a trade war is brewing. Last week the Trump White House announced plans for a 25 percent tariff increase on $50 billion in Chinese imports.China responded in kind, saying it would levy the same tax on American exports.
Now, just last night, the White House announced it will tax $200 billion in Chinese imports if China goes forward with retaliatory tariffs.
Is there any way to dial back this rhetoric and action or are we already in the throes of a trade war with our biggest economic rival on the planet?
Detroit Today host Stephen Henderson speaks with economist Dean Baker, senior economist with the Center for Economic and Policy Research.
“I think we should be fairly worried,” says Baker. “We will pay more for goods and services.”
Baker says he was sympathetic to many of Trump’s economic concerns as he was running for president, especially when it comes to how the economy was working for states like Michigan.
“Michigan really suffered in the last decade from our trade policy,” he says.
Baker says he’s skeptical about Trump’s promises of creating new jobs through these policies, even in the manufacturing sector.
Henderson also speaks with Mary Buchzeiger, president and CEO of Lucerne International, a global automotive supplier headquartered in Auburn Hills. Buchzeiger says her company could very well go under with a 25 percent tariff increase on imported goods. However, she says she believes President Trump wants the right thing — to eliminate the trade deficit with China and other nations.
“We’re still worried, we’re still worried what’s going to happen, but mostly for the auto industry,” she says. “I’m a global operation. I don’t know what’s going to happen. I don’t know where to put my next manufacturing operation.”
“I think everyone is surprised about the execution (of Trump’s policies),” Buchzeiger continues. “Things need to be addressed, but the execution portion — not so happy about it.”
Click on the audio player above to hear the full conversation.