Myth 5: China Is Misbehaving and Tariffs Will Make Them Change

This is the fifth installment in a holiday-themed series aimed at correcting common misconceptions about trade. Each day until Christmas, economists Christine McDaniel and Veronique de Rugy will address a new claim about trade or tariffs while providing additional resources for those interested in learning more about the topic.

Myth: China Is Misbehaving and Tariffs Will Make Them Change 

China is misbehaving, true, but Uncle Sam’s imposition of tariffs will not change their behavior. The elves know the truth: the very same tariffs that aim to punish China end up making things more expensive to produce in the US, encouraging production to shift out of the US. That’s a bad deal for America while providing scant incentive for China to change its behavior.

Suggested Resources

1. "Tariffs Are the Wrong Way to Fight Unfair Trade Practices," by Sherman Katz, Harvard Business Review

2. "Understanding US Tariff Actions: Two Sides of the Coin," by Stephen Olson, Trade Vistas