Beyond any doubt, public opinion played a significant role in shaping US trade policy during the US-China trade dispute. Several factors illustrate how public sentiment influenced trade decisions and policy directions.
These challenges to trade led to China’s growing embrace of export restrictions and bans signals its intent to use its economic power to weaponize supply chains and punish foreign firms and countries. As such, the move has alarmed policymakers and analysts in America, who worry it could harm their strategic industries.
While some segments of the population supported tariffs, there was also concern about the potential for increased consumer prices resulting from these trade policies. As prices for goods began to rise due to tariffs, public opinion became more divided. Some consumers began to question the effectiveness of tariffs, especially if they felt the costs outweighed the benefits.
Many Americans expressed concerns about job losses in manufacturing and other sectors due to globalization and trade agreements. This sentiment was particularly strong in regions that had experienced significant industrial decline. Politicians and policymakers took these concerns into account, leading to a more protectionist stance in trade policy. A portion of the American public supported the imposition of tariffs on Chinese goods, viewing them as a necessary measure to protect American jobs and industries from unfair competition.
This support was often rooted in the belief that China engaged in practices such as intellectual property theft and currency manipulation, which many Americans felt harmed US economic interests. Some sectors were more affected than others.
For instance, the agricultural sector faced retaliatory tariffs from China, which led to lower prices for certain crops like soybeans. However, in sectors where tariffs were applied, such as consumer goods and electronics, prices tended to rise.
For example, communities reliant on agriculture were often more critical of tariffs due to retaliatory measures from China that affected their exports. Conversely, manufacturing regions that felt threatened by competition from Chinese imports tended to support more aggressive trade policies.
China’s new export-control regime ostensibly tracks items that are “dual-use”, meaning they have both civilian and military applications. Chinese exporters of listed products must now tell the state who their customers are and what they are likely to use the goods for. But Mr Xi’s sanctions go far beyond non-proliferation and seem to be aimed at entrenching China’s economic domination of key technologies, materials and industries.
In doing so, he is deepening other countries’ dependence on China in areas such as solar panels and the batteries used extensively in electric cars. Although many rare metals are found in places such as Australia, Brazil, Greenland and South Africa, about 90% of the world’s capacity for refining them is in China. China produces almost all the world’s germanium and manganese, three-quarters of its lithium and natural graphite and half its antimony.
Often few good substitutes for such metals exist. When it comes to the magnets used in wind turbines, for example, only neodymium is best. Likewise, a wide range of electronics, from radars and smartphone chargers to the computer chips that will be used to train artificial intelligence, rely on a small number of rare minerals dominated by China.
One of these is gallium, which America has not produced since 1987. Although America imported less than $150m worth of the stuff last year, its impact is far bigger because it is used in high-value products. A full embargo would trim some $3.1bn a year from America’s output. Gallium is not the only critical mineral that China now dominates. Polls conducted during the trade dispute indicated fluctuating levels of support for tariffs and trade policies.
While initial support for tariffs was relatively high, concerns about rising prices and the economic impact of the trade war led to increased scepticism over time. This shifting public opinion prompted some policymakers to reconsider their positions.
In summary, public opinion was a critical factor in shaping U.S. trade policy during the US-China trade dispute. Concerns about job security, regional economic impacts and consumer prices all played a role in influencing policymakers and political discourse surrounding trade issues. As public sentiment evolved, it contributed to the ongoing debate about the effectiveness and consequences of tariffs and trade policies. In some cases, the US government granted exemptions or delayed the implementation of certain tariffs, (such as Canada and Mexico) which provided temporary relief. However, the uncertainty surrounding tariffs often led to volatility in pricing.
In conclusion, overall, the tariffs imposed during the US-China trade dispute has in the near term, contributed to higher consumer prices for a range of goods, affecting household budgets and spending patterns. The extent of the impact varies by product category and region, but the overall trend indicated that consumers faced increased costs as a result of the trade policies. The thrust of two mighty crushing balls have been released for a spectacular trade ordeal.
George M Mangion is a Senior Partner at PKF Malta
