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.
25:52
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Quick takeaways
- Imposing tariffs leads to higher consumer prices and distorts business production decisions, ultimately impacting global trade efficiency and economic growth.
- Political motives have increasingly influenced trade tensions, shifting tariff policies from economic rationales to tools for political negotiation and global trade complications.
Deep dives
Impact of Tariffs on Global Trade
Tariffs act as taxes on imported goods, which can lead to increased prices for consumers and a distortion of production decisions for businesses. When President Trump imposed broad tariffs on imports, he aimed to counter what he perceived as unfair competition from countries like China. For example, if a book that costs $10 is subjected to a 25% tariff, it becomes $12.50, effectively pricing out some consumers. This shift has also resulted in changing supply chains, with companies reconsidering their trade relationships to avoid tariffs, potentially leading to reduced overall trade efficiency and economic growth.
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