President Donald Trump has tried hard to convince the American people that he is winning the trade war with China — something he has claimed would be “easy” to do — but according to a new analysis, his battle with President Xi Jinping has already cost the U.S. economy 300,000 jobs.
Moody’s Analytics’ forecast estimated the number of jobs that would have existed were it not for the president’s trade war: “That’s a combination of jobs eliminated by firms struggling with tariffs and other elements of the trade war, and jobs that would have been created but haven’t because of reduced economic activity,” Yahoo Finance noted.
Mark Zandi, the firm’s top economist, said by the end of the year, the economy could be down as many as 450,000 jobs if Trump does not shift course. And by the end of the following year? Zandi told Yahoo Finance that 900,00 jobs could be gone.
Trump has now imposed or hiked tariffs on about half of all Chinese imports, with the average tariff increasing from 3.0 percent before the trade war to 21.2 percent today, according to Chad Bown of the Petersen Institute for International Economics told the publication.
Now, the president has set out to tax consumer goods as well, which began on September 1 and will be followed by more tariffs on December 15. By the time it is all said and done, Trump will have placed tariffs on virtually all imports from China.
Despite the economic indicators telling a different story, Trump continues to insist that the trade war is going fine and the U.S. economy is doing well. But as Yahoo Finance noted: “Growth is only around 1.6% at the moment, and it could slow to 1% or worse by the end of the year.”
Likewise, Trump’s assertion that it is China paying the tariffs, as opposed to the American people, is categorically false: “Those are taxes paid by American importers, who do their best to pass the added cost on to their own customers. Sometimes they can’t, and have to absorb the tariffs as a higher cost that lowers profits. And sometimes they can force their Chinese vendors to lower prices, to help offset the higher cost of the tariffs.”
Though no one knows for sure how or when the trade war will end, Beacon Policy Advisors told clients recently that it does not foresee a deal in the near future, particularly as both presidents attempt to save face in the trade debacle.
“We remain skeptical that [Chinese President] Xi will be willing to accept any deal, even one that is limited in scope, with Trump going forward.”