How U.S.-China trade spat could threaten manufacturing

By Natalie Kitroeff and Ben Casselman

Apr 05, 2018

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In the escalating economic showdown between the United States and China, President Trump is trying to put American shoppers first. The administration did not place tariffs on necessities like shoes and clothes, and mostly spared smartphones from the 25 percent levy on Chinese goods announced this week.

But by shielding consumers, Mr. Trump has put American manufacturers — a group he has championed — in the cross hairs of a potential global trade war. If the measures stand, along with China’s retaliatory tariffs, they could snuff out a manufacturing recovery just beginning to gain steam.

“If you want to spare the consumer so you don’t get this massive backlash against your tariffs, then there goes manufacturing, because that’s what’s left,” said Monica de Bolle, an economist at the Peterson Institute for International Economics. “The irony is, you cannot spare manufacturing from anything because manufacturing is globally integrated. The sector sources its parts and components from all over the world.”

That intricate supply chain often runs directly between the two countries, sometimes in both directions. A central aim of Mr. Trump’s America First agenda is to bring back pieces of the supply chain lying outside the country. The tariffs announced this week are just a bargaining point in a broader negotiation between the United States and China over trade.

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