Tariffs are Futile!

The international complexity and scale of China's growing influence means that imposing tariffs on goods "Made in China" would probably hurt the U.S. more than it hurt China. The fact is that as the United States has established factories and businesses in China, China has established factories and businesses in places like Africa. By outsourcing the final process of production for an item, the Chinese can make money off of something even without the "Made in China" label. On top of that, the "Chinese price" creates competition that drives prices down across the world, leading to cheaper goods for American consumers. If the Chinese goods were taken out of American stores, prices would rise for consumers. Additionally, through everyday trade the Chinese have amassed a wealth of U.S. dollars . Once the government obtains this cash, they turn around and invest in U.S. bonds. By investing huge sums of money in U.S. bonds, the Chinese keep American interest rates low and encourage more spending. Essentially, the Chinese are allowing U.S. citizens and their government to borrow money at a low interest rate. United States consumers fuel Chinese economic growth and Chinese economic growth keeps interest rates low, which fuels U.S. consumer spending.

Will this cycle end? Is there any way to modify the cycle? How can the U.S. government maintain its independence from a country with such strong economic ties to America?

With the upcoming election in the U.S., voters should remember that the war on terror is not the only international issue facing politicians. Voters should be asking candidates: What is your stance on China?