The proposed tariffs on $50 billion of Chinese imports, coupled with retaliation promised by China, would reduce U.S. gross domestic product by nearly $3 billion and destroy 134,000 American jobs, according to a new study released today by the National Retail Federation (NRF) and the Consumer Technology Association. The report finds that four jobs would be lost for every job gained.
“As administration officials prepare to head to China for trade talks, the livelihoods of American workers hang in the balance,” NRF president and CEO Matthew Shay said. “We hope this is the start of a serious negotiation process that leads to a more open Chinese market and protects U.S. jobs and economic growth. We must resolve this trade dispute without resorting to job-killing tariffs and retaliation.”
The study warns that imposing tariffs on an additional $100 billion of Chinese imports would come at a significant cost to the U.S. economy, destroying 455,000 jobs and reducing GDP by $49 billion.
“Tariffs could wash away the benefits recent tax reform will have on the economy, bringing uncertainty to American businesses and devastation to some workers in key states – they might lose their jobs over a trade tax,” CTA President and CEO Gary Shapiro said. “Rising costs on farmers, manufacturers and service providers isn’t the answer; it shows protectionism will weaken America. We are encouraged by Treasury Secretary Mnuchin and U.S. Trade Representative Robert Lighthizer’s visit to China and wish them success addressing China's problematic trade barriers. We believe it is best for the administration to seize on China's willingness to negotiate to achieve positive outcomes for U.S. workers, rather than via tariffs that ultimately harm us.”
While the impact of the tariffs would be felt across various sectors of the U.S. economy, agriculture would be hit especially hard. The net income of farmers would decline by 6.7 percent, and 67,000 agriculture jobs would be lost. And the hit to farmers would more than double if the tariffs expanded to an additional $100 billion of products. Farmer income would drop by 15 percent, and jobs in the sector would decline by 181,000.
The study also details the employment impact of tariffs at the state level. The ten states that would suffer the highest job losses are California, Texas, Florida, Washington, New York, Georgia, Missouri, Pennsylvania, North Carolina and Ohio.
Another recent NRF and CTA study examined the consumer impact of proposed tariffs on television sets and other products from China. The study found that a TV made in China that costs American consumers $250 today would cost $308 after the tariffs are applied, an increase of 23 percent.