U.S. imports and exports by country

U.S. imports and exports by country

Trump said he would impose uniform tariffs on all countries in the 10-20% range (probably 15%) and 60% differential tariffs on Chinese products to compensate for the tax cuts in corporate taxes and income tax cuts and strengthen the competitiveness of his own companies.

Perhaps the 15% flat tariff is the same condition for competing with other countries, so it is not a problem, and it causes inflation due to the increase in import tariffs and VAT by the American people.

In particular, if 60% (?) differential tariffs are imposed on Chinese products, Korean products (home appliances, materials) that compete with China can be more competitive than China.

Of course, price competitiveness with U.S. companies weakens as much as the tariff burden in competition with U.S. companies, but Korea's flagship exports (31% of semiconductors and home appliances, 11% of automobiles) can benefit from competing with China, where semiconductors and automobiles have local factories or are being built, and home appliances have 60% differential tariffs. Competition with China also gives general goods and materials an advantage.

Due to retaliatory tariff increases in each country, the number of tariff imported goods gradually increases, and the higher the tariff, the weaker the global supply chain, which increases the cost of producing goods, which causes inflation. Therefore, inflation may strengthen further in the future.

Meanwhile, China's export share to the U.S. is 15% (exports via Hong Kong or Mexico may be larger). The impact of high tariffs in the U.S. is less than before because exports are very low and diversified.

However, as the U.S. tariff hike affects China's economy, it is more likely to focus on boosting domestic demand than before, which could expand the domestic currency supply, fiscal spending and strengthen real estate stimulus.

On the other hand, differential tariffs in the United States are likely to accelerate further block formation as an opportunity for China to strengthen cooperation with other countries. Countries that have the hegemony of the global economy have always advocated free trade and globalization. The United States of America in the 20th century did the same as the British Empire did. However, as the United States protects its corporate will through protectionism, it is difficult to become a global G1 anymore, and it is seen as a transitional phenomenon at a time when economic hegemony changes.