FOR IMMEDIATE RELEASE
WASHINGTON, DC — January 14, 2021 — As the Biden administration takes the reins of US trade policy, the question of what to do with existing tariffs on Chinese goods in the long term remains up in the air. According to a new report from Oxford Economics and the US-China Business Council, the answer is clear—even a moderate reduction in tariffs would lead to an additional $160 billion in real GDP and 145,000 additional US jobs by 2025.
Failing to put an end to the festering trade war—or worse, pursuing significant decoupling with China—would cause both short-term shocks to company supply chains and productivity and long-term damage to US GDP growth and competitiveness. The report estimates that if the trade war continues to escalate, US real GDP growth could be reduced by $1.6 trillion over the next 5 years.
“What we’ve seen over the past few years is that raising tariffs does little more than raise costs for American families and shrink their opportunities,” said Craig Allen, President of the US-China Business Council. The report estimates the peak impact of the trade war to be 245,000 American jobs lost due to tit-for-tat tariff actions since 2018.
“Some in Washington are intent on severing ties with China, but this report shows that doing so would have staggering repercussions for the United States, costing billions of dollars in growth in the process,” Allen said. “If we don’t find ways outside of self-defeating tariff measures to address differences with China, American workers will continue to suffer.”