Trade: US tariffs will hit non-Chinese supply chains even harder, study shows

“You can see these two perspectives not only in the tariffs imposed on Chinese goods, but also in tariffs imposed on products from US friends and allies,” he said.

Economists and trade experts have disagreed with Trump’s interpretation of the cause and benefit of the trade imbalance. They believe that the US trade deficit is caused primarily by its fiscal policy, the low saving rate and the role of the US dollar as a global reserve currency.

“Trump is ignoring the pleas of the business community. He seems to be betting that his get-tough approach against China will make his political base happy, even though these policies will hurt many of them in the long run,” Morrison said.

“A trade war would be very costly to both economies and the global economy as a whole,” he added.

A study led by Mary Lovely at the Peterson Institute showed Trump’s latest tariffs on China will hit non-Chinese supply chains even harder. Many of Chinese exports to the US come from foreign companies operating in China.

Edward Alden, a senior fellow at the Council on Foreign Relations, said the only way for the Trump administration to change course is as a result of domestic political pressure.

“My hope is that then there will be a period of reflection in which all the countries involved will find a way to come back to the negotiating table,” he said.

“I still believe there is time to prevent this trade war from further escalation, but we are in a dangerous period,” Alden said.

On Friday, the Office of the US Trade Representative announced guidance for companies on how to apply for exclusion from the newly imposed tariffs on products made in China. Companies will have 90 days to file the requests.

“The real intention of the Trump administration is to deter China while minimizing the negative impact on its electorate,” said Mei Xinyu, a researcher with the International Trade and Economic Cooperation Institute of the Ministry of Commerce.

“In fact, even if a certain number of US companies obtained exclusions from the additional tariffs, it would not relieve the pressure on its overall economy. High costs imposed on Chinese goods would eventually be passed on to US consumers,” said Li Yong, deputy director of China Association of International Trade Expert Committee.

WANG ZHONGJU / CHINA NEWS SERVICE Tourists enjoy a meal on a cliffside path more than 2,000 meters above the ground on Laojun Mountain in Luoyang, Henan province, on Sunday. The event was part of a two-month tourism festival, which runs through Aug 31.