As US business leaders grapple with consequences of the Trump administration’s inclination to use tariffs, new research released this month detailed the potential scale of the self-inflicted pain.
Washington DC-based consulting firm Trade Partnership Worldwide put together a report estimating the possible effects should the US go through with threatened escalation in tariffs on Chinese goods and new duties on foreign autos.
The damage inflicted to the US economy due to tariffs already imposed, as well as possible additional tariffs and retaliation, could end up shaving 1% off of GDP growth, while costing more than 2 million jobs, the economists found.
Higher tariffs on Chinese goods alone, which are scheduled to go into effect on March 1 if no deal is reached, would result in the loss of nearly 1 million jobs.
Those direct effects do not take into account losses accrued from the loss of business investment due to increased policy uncertainty.
The job losses, the report claims, would be spread across every US state.
Opposition to the Trump administration’s trade policy has attracted bipartisan support in the US Congress, with some momentum building to pass legislation that would limit presidential authority over trade policy.
But the bills that have been introduced would only address the tariffs that have been imposed on steel and aluminum imports – as well as potential tariffs on foreign-made autos. Both the metals tariffs and the review of possible auto tariffs cite national security as a basis for imposing tariffs.
The new legislation, if passed, would not curb the president’s power to target alleged unfair trade practices through tariffs, as is the case with China.
The White House is not just under pressure from lawmakers. Business leaders have reportedly redoubled their efforts to prevent a further escalation in the trade tensions with China, ahead of the fast-approaching March 1 deadline.
Trump administration officials delayed the implementation of tariffs that were scheduled to go into effect on January 1, pending the outcome of trade negotiations with China. But with less than three weeks left to strike a deal, reports indicate that the two sides still do not even have a draft of an agreement.