World issues and their impact here at home
A front page headline in last Monday’s New York Times reads “China, Facing U.S. Hostility, Vows to Come Out Swinging.” Of course, most of our readers do not directly import goods from China, but this relationship, which could evolve into a major trade war affects each of us.
It is easy to overlook the extent to which we are economically interconnected. I suspect that most of you can look within your own home and find furniture or other items produced in another country. For me that applies to looking in my refrigerator.
The latest proposal by our president would place a $200 billion tax on imports from China. The Chinese response could take one of two paths, or a combination of both.
The first would be to simply pass along this extra cost to U.S. consumers, which would immediately increase the cost of your next computer, TV or other electrical devices that depend on Chinese imports.
The second path would be to place an equivalent tax on items imported into China. This would risk a significant drop of sales by U.S. firms and ultimately result in a drop in U.S. employment opportunities.
Some will argue that if we tax the imports, we would simply shift to purchasing products of U.S. manufacture. While there would be some of this, history does show the likelihood of a net gain for U.S. consumers.
Since it is far easier in the world of internet for ordinary citizens to follow and assess trade issues, I would encourage more people to do so and to advise your elected officials how you would have them vote. It does make a difference.
(John Reppert is an Anna native and former editor of The Gazette-Democrat. He served in the U.S. Army, rising from the rank of private to brigadier general. He earned a PhD in international relations and taught at the University of Maryland. He also served as the executive director of research at Harvard University’s Belfer Center. He can be contacted by email at firstname.lastname@example.org.)