Alarm bells are ringing about President Donald Trump’s pronouncements against China as well as his threats to impose a 45% tariff against Chinese imports after declaring the country to be a “currency manipulator.” For all the concern, however, I have not seen a single calculation of the dollar costs, or impact on jobs, if Trump’s policies were actually implemented. This article is an attempt to estimate the answers to the following questions:
In the event of a break in the bilateral relations,
- How many jobs in the US and China are at risk?
- What would be the extra purchase price for consumers if, hypothetically, imports from China were replaced by US manufactured products?
- Is it possible, or even likely, to “bring back” production from China to the US?
- What would be the consequences if China retaliated against US-made products and services? What if China pulled out its $1.2–1.8 trillion investment in US securities? And what about American companies’ investments in China?