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Trade protectionism is harming U.S. manufacturing

(People's Daily Online)    13:40, July 07, 2018

Trade protectionism is harming the U.S. manufacturing industry, as some enterprises have decided or are planning to transfer parts of their businesses out of the states in order to avoid possible impacts the protectionist trade policy may incur.

117-year-old U.S. motorcycle company Harley-Davidson recently announced plans to move part of its motorcycle production out of the states.

On July 3, U.S. president Donald Trump said the U.S. is the best place to do business, adding that he is working on introducing other motorcycle companies to his country, without disclosing how.

Harley-Davidson is not the only U.S. company attempting to avoid the protectionist trade policy. Mid Continent Nail Corp has also said it may have to suspend its operations or move them to Mexico if the Trump Administration fails to offer tariff exemptions on steel products.

Mid Continent Nail Corp is reported to have already laid off 10 percent of its staff because it couldn’t afford the additional costs incurred when importing raw materials from its mother company in Mexico.

Trade protectionism leads to rising tariffs on raw materials that companies in the U.S. need for production, increasing costs and therefore making U.S. products less competitive domestically.

Also, because of the increasing tariffs, countries affected by trade protectionism will have to substantially raise prices of U.S. products in their own market, which will consequently reduce competitiveness of American goods on an international scale.

Instead of protecting enterprises, trade protectionism has become an obstacle that damages America's business environment. It has forced U.S. companies to move their businesses out of the country, which will cause workers to lose their jobs.

According to European media, the Harley Davidson case is a warning to the outdated trade protectionism of the U.S.

The trade war, unilaterally started by the Trump Administration, is a lose-lose battle. In the 1930s, the U.S. government started a trade war by implementing the Smoot-Hawley Tariff Act. Due to the trade war, the import volume of the country fell by more than 60 percent, and the unemployment rate almost quadrupled. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji, Hongyu)

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