US President Donald Trump [Photo/Agencies]
United States President Donald Trump said on Sunday that he will announce 25 percent tariffs on all steel and aluminum imports starting on Monday, a move which analysts warn could make it harder for the White House to tame inflation.
The ongoing trade war initiated by the US shows no signs of abating and could escalate further, analysts said, adding that it will not help Washington achieve its goal of reshoring manufacturing and could backfire.
"Fighting inflation was one of Trump's campaign promises, but tariffs will only make inflation worse," said Yao Yang, director of the China Center for Economic Research at Peking University.
"High inflation under the Biden administration was one of the key factors that sent Trump back to the White House. Trump may not care about how angry the Democrats are about his policies; but he needs to care about the reaction of his political base," Yao added.
"These tariffs will translate into higher input costs for a wide range of industries that rely on steel and aluminum such as automobile manufacturing and construction, and those additional expenses will likely be passed on to consumers," said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.
Moreover, these sweeping tariffs, Zhou noted, could disrupt supply chains and undermine the competitiveness of US industries, further complicating the administration's ambitions to revitalize domestic manufacturing.
"If the Trump administration is serious about bringing manufacturing jobs back to the US and reducing its trade deficit, it's most sensible policy is to allow Chinese companies to invest in the country," Yao said.
"China's industrial structure is complementary to the US' --- the US are strong in high-tech industries, and China is strong in medium-range industries," Yao said, adding that, "President Trump is good at cutting deals; he will soon realize that welcoming Chinese investments is a much better deal than imposing tariffs on Chinese exports."
