Don’t abandon trade with China post-coronavirus
Both Lincicome and R Street Institute Trade Policy Counsel Clark Packard stressed that protectionist policies restricting trade with China would hurt the working class and lower-income consumers the hardest.
“[American businesses] would lose a significant customer base if we eliminated trade with China,” Packard warned. “And American consumers would see prices increase.”
“If you look at the products we import from China, you’re going to see clothing, shoes, toes, consumer electronics … interestingly, the higher-end versions of those products are typically not made in China. Because of that, China trade disproportionately benefits lower-income Americans,” Lincicome concurred.
However, both experts agreed there are some limited instances when trade with an adversarial China simply is not feasible or appropriate, such as products with military applications and certain advanced technology. Yet this is not what populist critics are calling for; rather, many seek a total decoupling of the U.S. economy from China — but this would be a mistake for more than just economic reasons.
Packard cited the diplomatic benefits of maintaining trade with China.
“Countries that have trade and investment ties are less likely to go to war,” he explained. “So, we should be skeptical of the hawks in the United States saying it will make the U.S. safer if we cut off trade with China. I think history has proven that to be exactly the wrong idea.”