Can The Us Get Rid Of The Negative Effects? "45% Tariff" Is Not A Trivial Matter.

In less than twenty years, trade between China and the United States increased from 70 billion US dollars at the beginning of this century to 600 billion US dollars last year.

Among the Chinese exports, the United States occupies the first place, accounting for 18% of China's total exports, while China ranks third in the US's exports, accounting for 10% of the total exports of the United States.

Trump's "45% tariff" may not seriously hurt China's export volume.

In March this year, Trump said that in order to promote business development in the United States, it recommended 45% tariffs on products from China.

But Trump consultant Wibur Ross has said that the Sino US trade war will not happen. The "45% tariff" is only a misunderstanding. Only when the RMB is undervalued by 45%, the United States will be able to impose a 45% tariff on Chinese imports.

HSBC believes that if the United States charges 45% of the high tariffs on China, bilateral trade will be reduced by 50%. But because the added value of China's exports is higher and higher, and it can counteract its negative effects by strengthening the links with emerging markets, the total export volume of China will be controlled.

To investigate such a high

For the impact of Sino US trade relations, we first need to clarify the scale and structure of the two trade.

From the perspective of trade structure between China and the United States, China's exports to the United States are mainly products of machinery (51% of total exports) and labor-intensive, low value-added products (such as shoes and garments which account for 33% of total exports).

The products exported to China are mainly concentrated in the primary industries, such as agricultural products, natural ores, and advanced manufacturing industries such as automobiles and airplanes.

It is worth noting that China's export structure is constantly changing and upgrading. Now the added value of export products is increasing.

From 2000 to 2016, the share of machinery and pport equipment in China's total exports increased from 33% to 47%, and the share of labor-intensive products such as toys dropped from 35% to 27%.

Against this background, HSBC calculates that

With a tariff of 45%, China's exports to the United States will decline by 52%, accounting for 9.3% of China's total exports, and the smaller the total export volume will be because China will export more products to emerging market economies, thereby counteracting the negative impact of US tariff policy.

In addition, the United States can earn about $89 billion in customs revenue.

If the United States only charges 45% tariffs on China's labor-intensive products, the export scale of such products will decline by 27%, accounting for 1.7% of China's total exports, because the proportion of such products in the total volume of China's exports is relatively low, and the US government will receive 49 billion dollars in tariff revenue.

In addition, HSBC also envisaged China's retaliatory tariff.

In this case, because the volume of GDP in the United States is about two times that of China, and exports account for only 10% of GDP, and the dependence on China's export target is not high, the US will be less affected than China.

But that does not mean that the United States can get rid of the negative effects.

Because China is an important market, agriculture and

And other sectors will be hit, and it is the United States that has competitive advantages in strategy and economy.

The chain reaction between the economic ecosystem and the labor market should not be underestimated.