The recent victory of President-elect Trump has once again brought the tariff debate to front and center. Trump continues to talk about tariffs as the “go-to” tool for balancing our trading relationships, halting the “cheating” by our trading partners, bringing U.S. manufacturing home, and raising revenue to support other tax cuts.

Of the wide array of tariff proposals floated by Trump, his initiative to impose at least an additional 60 percentage points of duties on imports from China is one of the most severe. Even before recent Biden selective tariff hikes, the U.S. average tariff rate with China was close to 20 percent, having increased significantly during his first term.

An additional 60 percentage point increase would bring many of these rates to the “prohibitive zone,” essentially stopping trade. Some speculate this may be a way for Trump to gain leverage to negotiate a new bilateral trade deal with China. But, in many ways this time around it seems to be more about disentangling our two economies rather than getting to a deal.

What’s lost in the debate, is the effectiveness of such tariff increases, particularly at a time when Chinese investments in third countries are growing by leaps and bounds. For example, Chinese investment in ASEAN countries has surged from less than $4 billion in 2010 to $17 billion in 2023.

As Chinese companies set up more factories abroad in the automotive, clean energy and electronics sectors, the goods produced by these firms in third countries would not be subject to Trump’s 60 percentage point tariff increase. Rather, these goods under current international trade rules would receive the tariff........

© The Hill