A worker checks parts for the battery packs at a factory of Sunwoda Electric Vehicle Battery in Nanjing, China, which makes lithium batteries for electric cars.
The immediate impact of these tariffs will be small, because the United States currently imports very few of the affected goods from China. But Biden’s moves are more than a symbolic gesture. They’re a shot across the bow — a signal that the U.S. won’t accept a second so-called China shock, a surge of imports that could undermine crucial parts of the administration’s agenda.To understand what I’m talking about, it helps to review some economic and intellectual history.
However, the economic debate shifted after the 2013 release of a study by David Autor, David Dorn and Gordon Hanson, titled “The China Syndrome,” which later became more widely known as “the China shock.” The authors estimated that Chinese imports had displaced around 1.5 million U.S. manufacturing workers between 1990 and 2007. That in itself isn’t that big a number in an economy as large and dynamic as ours: In fact, in America, around 1.
So the first China shock was a real problem, and even generally pro-free-trade economists — economists who have no sympathy for crude, Trump-style protectionism — now worry about the effects of rapid increases in imports.But wait: Why do I say the first China shock? Because there’s now clearly a second China shock building.
Whatever the ideology or strategy behind China’s refusal to increase consumer spending, the only way out given that refusal is to run giant trade surpluses, dumping the stuff China produces but can’t or won’t consume in other countries’ markets.