According to sources, Donald Trump’s new trade team is no fan of how China and Mexico deal in trade with America.
Commerce Secretary nominee Wilbur Ross stated back in 2015:
“China…could be heading for some difficulties if the Trans-Pacific Partnership gets approved.”
He also co-authored a paper where he called China “the biggest trade cheater in the world.”
Now, Donald Trump is considering a 10% tariff on all imports or changes to tax policy that could possibly level the playing field.
Douglas Holtz-Eakin, president of the American Action Forum, commented on Trump’s plans by saying: “They want to get rid of existing trade agreements [and] put up tariffs…Those are all protectionist moves.”
Derek Scissors, a China expert at the American Enterprise Institute, said, “If they come in with a 5% [tariff], that’s very different than 35%.”
At this point we have two options: Put up tariffs on other countries, or use taxes to make trade fair.
Needless to say, many question remain. How will this effect the global economy? Will Trump ruin our trade relations will this country? And if so, how will that effect monetary policy?