What do China's tariff cuts mean to US economy?

Source:Global Times Published: 2019/12/23 22:51:46

Photo: Xinhua

Is there a "butterfly effect" linking Monday's tariff cuts by Chinese authorities with the prices of Bibles in the US?

China announced on Monday it would lower tariffs on imports ranging from frozen pork to some wood and paper products. Monday's tariff cuts may have an effect on the US economy, and the prices of Bibles are just one example. Bibles are overwhelmingly printed in China due to the specialized printing technology needed. Planned duty cuts on wood and paper products are very likely to reduce production costs for Bibles and children's books that are predominantly printed in China. 

Several months after book publishers expressed concern about whether the trade war launched by Washington would lead to a "Bible tax," the situation has been reversed: planned duty cuts may reduce expenses for churches and consumers in the US. This is a hard-won achievement after a trade war lasting more than a year. China and the US are moving in the right direction to warm up their economic ties. Hopefully the two countries, especially the US, can move faster toward the vision of lowering tariffs. 

The US side has long been focusing on how to maximize its economic benefits by reducing its trade deficit with China, but the example of the Bible made people aware of Chinese goods' significance in reining in US inflation and benefiting low-income US consumers. Cutting the trade deficit is not the only possible direction of Sino-US economic ties. Bilateral relations between the world's two largest economies are more complicated than what some people think.

China serves as a key player in global supply chains. If China lowers import tariffs on intermediate industrial goods to reduce production costs, consumers all over the world, including those in the US, will be the ultimate beneficiaries.

Some observers think Sino-US ties have become more competitive than complementary in trade and technology as the trade war has progressed. It is still too early to draw any conclusions about this. However, it's clear that global high-technology competition has become an increasingly inter-state race. 

If Washington does respond to China's tariff cuts and relaxes its high-tech export controls, US companies will be under less pressure in the Chinese market.

Monday's tariff cuts may have an impact on the China-US technology competition if Washington acts too slowly in pushing forward free trade.

Posted in: GT VOICE