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US-China trade war affects Greater KC area businesses

Tuesday, August 25, 2020

LAWRENCE — During war, the costs of conflict must be outweighed by measurable gains. That also applies to a trade war.

“Yet major economic issues with China remain unresolved with no end in sight,” said Jack Zhang, assistant professor of political science at the University of Kansas.

Zhang recently gave a presentation titled “Impact of the Trade War on Greater Kansas City Businesses” at Go Global KC, the annual trade event organized by the Chamber of Commerce and World Trade Center KC. It’s based on the findings of a survey conducted by his newly established KU Trade War Lab, which provides a bottom-up, firm-centric view of the U.S.-China trade war.

“This trade war, already the largest economic conflict in history, has become a war of attrition,” he said. “Most of the new tariffs remain in place even after the signing of the Phase One deal on January 15, and it is businesses and consumers like those surveyed here in the K.C. metro that are paying the cost.”

One of the most surprising findings from the survey is that a much larger percentage of respondents report being harmed by tariffs (76%) than by COVID-19 (33%). This is also higher than a national survey conducted by Zhang’s colleagues in which 46% reported being harmed by tariffs.

The professor noted this disparity is partially due to the businesses that responded to his survey, including 35% in manufacturing, 20% in professional services and 13% in wholesale and retail.

“These sectors have not been the hardest hit by COVID-19, compared to say, hospitality, but have been harder hit by tariffs. I think it is also important to recognize that the trade war has been very disruptive to U.S. business overall — it is estimated to have cost the economy 300,000 jobs long before the pandemic hit — and the K.C. metro area is one of the most vulnerable to retaliatory tariffs,” he said.

Zhang said a majority of survey respondents claimed that a candidate’s stance on tariffs will play a role in who their company will support in the 2020 elections.

“I hope the issue of tariffs will receive more attention amongst the candidates this election cycle and that our survey will help inform the policy debate,” he said.

To schedule an interview with Jack Zhang, please contact KU News Service public affairs officer Jon Niccum at jniccum@ku.edu.