Since President Joe Biden took office 10 months ago, his administration has been working to reverse many actions taken by the Trump administration. As a proponent of free trade, I can’t help but wonder: Why is he allowing the Trump administration’s harmful trade war with China to continue? This trade war is hurting American business, adding to inflationary pressures, and increasing the risk of international conflict.
When tariffs are placed on items imported from China into the United States, (which the last administration claimed would punish China and lower demand), American businesses are the ones paying these taxes, because they need these goods to operate. In turn, American businesses pass these costs onto the consumer – us!
Despite this, the Biden administration has kept these tariffs, set by the Trump administration in 2018, in place. These tariffs are taxes on about $350 billion worth of goods from China, and the administration doesn’t appear to be removing them anytime soon. This means U.S. businesses will continue paying higher taxes on goods they need to sustain operations, because of a trade war that is “supposed to” hurt China. This doesn’t make fiscal or political sense, and it also adds to inflation as businesses pass their increased cost onto the American consumer.
Delaware alone imported $443 million worth of goods from China in 2020. That’s almost half a billion dollars in imports that businesses were forced to pay higher tax rates on at no fault of their own.
This is hitting just about every major industry in our state, given the importance of trade to Delaware’s economy. Chemical manufacturing, which is the second largest manufacturing sector in the state, ships more than half a billion dollars in goods to people across the world. It’s one of the biggest job-creating industries in our state, but its growth has been limited by the trade war. Meanwhile, while the agriculture industry in Delaware is thriving, ranking second behind California in per farm sales, even that industry is not performing at its peak because this trade war continues to levy harmful tariffs on the goods the industry needs.
Of course, China also isn’t upholding its end of the Phase One Deal, meaning fewer exports for our state. This harmful trade war is holding back businesses and industries in Delaware by not allowing them to reach their fullest potential.
It’s time for President Biden and Trade Ambassador Katherine Tai to see this trade war for what it really is: a painful burden for businesses, workers, and consumers while increasing international tension. This administration realizes how desperately Americans need help and is willing to potentially pin its legacy to legislation designed to build the nation back. Removing harmful tariffs and ending this trade war should be assigned equal priority. You can’t build a nation back, and certainly not better, by making businesses pay higher taxes on goods they need to stay afloat.
Delaware relies on Sens. Chris Coons and Tom Carper to be a voice of reason and fight for businesses and consumers across the state. We need our voices heard in Washington and it starts with our elected officials recognizing the harm this trade war is causing. If President Biden and Ambassador Tai won’t end what Trump started, then I hope Sens. Coons and Carper can explain to them that a nation willing to spend $1.75 trillion to spur regrowth must find a way to spare businesses from these onerous tariffs.
In addition to the many economic reasons to end the trade war, a favorite quote of mine (often attributed to 19th century French economist Frederic Bastiat) reads, “When goods don’t cross borders, soldiers will.” Quite simply, countries that trade freely together generally do not go to war with each other. Ending the trade war with China can help Delaware and American businesses and customers, reduce the potential for conflict, and cut inflationary pressures.
James Spadola is a Wilmington city councilman and the executive director of Read Aloud Delaware.