Washington, Feb 3: Former U.S. President Donald Trump’s trade war on China was a failure in every possible way, U.S. news website Axios has reported.
Commenting on U.S. President Joe Biden administration’s announcement to review the phase one U.S.-China trade deal, an article published on the website on Monday said that based on publicly available data, “it’s hard to imagine they’ll find anything other than a debacle.”
“The trade war with China hurt the U.S. economy and failed to achieve major policy goals,” a recent study commissioned by the U.S.-China Business Council was quoted as saying. The study also indicated that the trade war reduced economic growth and cost the United States 245,000 jobs.
The trade war, said the article, was billed as a plan to bring China to its knees by choking off the all-important American market with 25 percent tariffs on many imports that would rein in the U.S. trade deficit, boost American exports, among others.
However, what really happened is that the U.S. trade deficit widened to its largest on record in last year, it said. In the fourth quarter, the U.S. goods trade deficit hit its highest share of GDP since 2012 and the U.S. current account deficit jumped to its highest level in more than 12 years in the third quarter.
Meanwhile, the foreign direct investment to the United States fell 49 percent in 2020, outpacing the overall global decrease of 42 percent.
“The tariffs forced American companies to accept lower profit margins, cut wages and jobs for U.S. workers, defer potential wage hikes or expansions, and raise prices for American consumers or companies,” analysts at Brookings Institution were quoted as saying.
These trends have all been moving in this direction since 2017, and were accelerated by the COVID-19 pandemic as Trump refused to remove tariffs despite their strain on businesses, it said.