A Reuters/Ipsos poll shows a large majority of Americans support tariffs against China imports. How many? 66% of respondents told global polling firm Ipsos that they were more likely to back a candidate in the 2024 presidential election who “supports additional tariffs on Chinese imports.”
Tariffs were first imposed on China goods back in 2018 when the Trump Administration used Section 301 of the 1974 Trade Act against America’s biggest commercial rival. Section 301 allows the president to place extra tariffs on products coming from countries whose trade practices are deemed unreasonable, or discriminatory and places a burden or restricts U.S. commerce.
Since those tariffs were enacted, talk about tariffs raising inflation have been debunked. And Wall Street survived the disruption, even as financial pundits railed hard against the new trade duties against what had become their more cherished market.
The U.S. Trade Representative will undergo a review of the Section 301 tariffs this fall. More exemptions are plausible, but it is highly unlikely that tariffs will be removed.
This summer, fresh off her trip to China, Treasury Secretary Janet Yellen said it was too soon to remove tariffs. “The tariffs were put in place because we had concerns with unfair trade practices on China’s side — and our concerns with those practices remain. They really have not been addressed,” she said, “Perhaps over time this is an area where we could make progress, but I would say it’s premature to use this as an area for de-escalation, at least at this time.”
From the Ipsos poll, another 66% of respondents — including 58% of Democrats and 81% of Republicans — agreed with a statement that the United States “needs to do more to prepare for military threats from China.”
The U.S. defense industry is deeply reliant on materials sourced from China, both commodity materials and low to high grade technology.
In June, Raytheon CEO Greg Hayes said his company, and the U.S. more broadly, could “derisk” from China but cannot “decouple”.
“Think about the $500 billion of trade that goes from China to the U.S. every year. More than 95% of rare earth materials or metals come from, or are processed in, China,” Hayes told the Financial Times. “There is no alternative,” he added. Raytheon relies on several thousand suppliers based in China, he told the paper back in June.
Ironically, Hayes was sanctioned by China in 2022 for selling weapons to Taiwan.
The Defense Department will play a key role in reshoring American supply chains, especially from China. Recent laws like the Bipartisan Infrastructure and Jobs Act, the CHIPS Act, and the Inflation Reduction Act, either require U.S. components when building infrastructure projects like bridges and telecom towers, or receive government incentives such as tax credits if manufacturing solar and semiconductors domestically, for example. Both solar and semiconductors are an Asia-centered industry, with solar coming almost exclusively from mainland China or dominated by Chinese multinationals spread throughout southeast Asia.