US economic growth would benefit from an “even moderate” reduction in tariffs, according to a report. (Photo: 123RF)
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Even a moderate reduction in tariffs on Chinese products would have a beneficial effect on economic growth and employment in the United States, according to a report published by the US-China business council (USCBC), which brings together 200 American companies who do business with China.
“In our de-escalating trade war scenario, where both governments are gradually reducing average tariff rates to around 12% (from around 19% now), the U.S. economy generates an additional $ 160 billion in real GDP over the course of over the next five years and employ 145,000 additional people by 2025 ”, according to this report.
Entitled “A Crucial Partnership at a Critical Time”, it was produced by the research and consultancy firm Oxford Economics.
In addition, the income of American households would be higher by 460 dollars per household, due to the increase in employment and incomes as well as the fall in prices since many consumer products are imported from China.
This report is published as President Joe Biden is due to detail his trade policy next Thursday, the day after his official arrival at the White House.
His comments on trade relations between the United States and China, which have particularly deteriorated under Donald Trump’s tenure, are eagerly awaited.
So far, the president-elect has hinted that he could follow through on China as national security concerns are shared by Republicans and Democrats.
In early December, Joe Biden himself underlined his intention to stand firm with China by forming a united front with its historic allies such as the European Union. A change of strategy, in short, more than of policy.
The Oxford report also developed an opposite scenario including an escalation of the trade war and bilateral ties that would continue to wither away.
“The US economy would produce (then) 1.6 trillion dollars less over the next five years and lose 732,000 jobs in 2022 and 320,000 fewer jobs in 2025” warn the authors.
They also calculated that by the end of 2025, American households would see their income drop by $ 6,400.
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