No new jobs and still the same trade deficits: A German study shows that US President Trump’s trade policy has not been fruitful.
According to a study, US President Donald Trump has not achieved the desired success with his aggressive trade policy. Neither the termination and renegotiation of several agreements nor the numerous import tariffs have created jobs in the US or significantly reduced trade deficits, according to the study published Thursday by the German Institute for Economic Research (DIW).
American measures leave Europe and North America cold
“Only the trade deficit with China shrank somewhat last year, but has increased again this year,” said study author Geraldine Dany-Knedlik. “In trade with Europe and the other North American countries Canada and Mexico, the measures have barely worked.”
Imports of steel, computers and electronics from China, in particular, have fallen noticeably due to the introduction of the tariffs. There was also a decline in other areas, such as household appliances and electronic components. But tariffs would have made imports more expensive for US businesses and households.
Especially “Rust Belt” has been hit
“This is the crux of Trump’s trade policy: he wanted to make US products more attractive through tariffs. Instead, his policies have made products more expensive,” said author Paul Berenberg-Gossler. Studies estimate the welfare losses of US consumers as a result of the import duties levied up to December 2018 at more than 50 billion euros per year.
In particular, the manufacturing industry, which relies on imports from China as intermediate input, is facing higher production costs, the DIW emphasized. This particularly affects the so-called “Rust Belt” states, as well as Mississippi and Alabama. About 75,000 jobs were lost as a result of this policy.