What Middle GA needs to know about the US-China Trade War

Jackson Hopkins, an area manager at a Warner Robins Walmart, said  he has witnessed how the tariffs have impacted the price of goods.

“I just know that (President Donald) Trump put some kind of tariffs on China or something that’s causing prices to go up on Chinese goods,” he said. 

Since 2018, the United States has been engaged in a “Trade War” with the People’s Republic of China. It started over disputes regarding intellectual property rights and has risen to tariffs and currency manipulation. Even though it’s an international issue, Middle Georgia is being impacted by the increasing measures. 

The details of the dispute — such as its origin of the Trade War, the steps taken by both countries, and the impact on Middle Georgia — can be a point of confusion but most people clearly understood the situation’s status as stagnant.

“China is just not wanting to cut any slack and I don’t think the United States is either,” Hazel Ryals , a retiree from Byron, Georgia said.

But, Dr. Antonio Saravia, an Assistant Professor of Economics at Mercer University who studies political economies with an interest in the US-China relationship, said there’s a little bit more to it than that. Beyond consumers facing higher prices, Georgia industries that depend on Chinese supplies are also struggling.

“Manufacturers or producers in Georgia use  Chinese supplies, intermediate goods,” Saravia said.

Things like solar panels, aluminum, steel, and lumber are all materials that are affected by the tariff and changing how domestic businesses operate.

“So now those are more expensive, which means that either you reduce your bottom line or you increase prices,” Saravia said.

He said the public’s larger misunderstanding of the Trade War come from the belief that importing goods from abroad is somehow damaging our economy.

“So for some people, if we produce everything in America, we make America great again,” Saravia said. “What they don’t realize is that if we tried to produce everything ourselves, everything is going to be more expensive because we don’t have competitive advantage by definition on everything.”

Instead, Saravia said people should think of imported goods as allowing America to spend its money where it’s most effective. 

“If the United States focuses on their competitive advantage, which is research and development technology, you know, Silicon Valley, those kinds of things,” Saravia said. “America is better as a result.” 

Saravia said it’s important people realize that tariffs are at the root the Trade War and what are causing the most damage.

“So tariffs are bad, like 100 percent bad,” Saravia said. “They hurt the entire economy. So the first ones to feel the increasing prices, of course, are customers, consumers, people that buy those Chinese goods, which at the end of the day is everybody.” 

For those who still find the Trade War confusing, Saravia said it’s best to compare the countries’ situation to a trip to Walmart.

“You’re buying everything from Walmart, Walmart is not buying anything from you. You’re going to impose now a tariff on Walmart products,” Saravia said.  “So you’re going to make those products more expensive to yourself. So you stop buying those goods.”  

Thus, the Trade War cycle repeats itself. A country takes a stand with tariffs, prices rise, discontent grows and tariffs increase to make a larger point. Saravia said this cycle will only end once President Trump and (China’s President Xi Jinping make a deal, but it’s not something he’s optimistic about.  

“He may reach a deal with China, but he’s going to find somebody else to fight with,” Saravia said. “And unfortunately in the middle of everything, there’s going to be consumers, companies that are going to be hurt and, and we’re just hurting the entire economy.”

US and Chinese officials are continuing to meet in the hopes of reaching a trade deal, but no significant progress has been announced.