The Story Trade Wars: Trump vs China
Feb 6, 2025
In this insightful discussion, Dr. Linda Yueh, an esteemed economist from Oxford University and London Business School, delves into the escalating trade war between the U.S. and China. She unpacks the historical parallels of tariffs and economic strategies, shedding light on political motivations tied to issues like the opioid crisis. The conversation explores the complexities of global trade, from protectionism's effects to the rivalry's implications on consumers and companies. It’s a deep dive into how power struggles shape the future of international relations.
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Tariffs as Political Tools
- Trump's tariffs aim to counter unfair competition and address non-economic issues like fentanyl imports and immigration.
- This marks a shift towards using trade as a negotiation tool.
Mechanics of Tariffs
- Tariffs act as a tax on imported goods, increasing consumer costs and distorting firm production decisions.
- This can lead to shifting supply chains as businesses seek to avoid targeted countries.
Retaliatory Measures
- Canada and Mexico responded to tariff threats with retaliatory tariffs, later negotiating a truce involving border troop deployments.
- China retaliated with tariffs on U.S. energy and restrictions on rare earth exports, escalating the trade war.