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Could This Be the Solution to America's Trade Dispute with China?

Donald Trump China
Donald Trump China

WASHINGTON – Tariffs are at the core of investors' concerns over America's trade dispute with China, with President Donald Trump seeing them as a necessary tool to force the Chinese to negotiate.

So far, however, all China has done is retaliate with more tariffs.

But several analysts, including former Trump economic adviser Stephen Moore, are proposing a plan they believe would solve the trade turmoil without further tariffs.

Under the so-called "zero-for-zero" proposal, all tariffs, barriers and subsidies between the US and its allies would be dropped.

"You offer these countries, 'We'll go to zero tariff if you will,'" Moore told CBN News.

The goal of the proposal, the former Trump economist explained, is to create "a level playing field."

Moore predicts it will also benefit American consumers by driving down the cost of goods and services.

"Tariff is a tax, so if we can get the tariffs down to zero, that means not only will goods and services cost less here when we go to Wal-Mart, Best Buy or wherever it might be – that's a good thing for American consumers – but also think about the jobs this would create," he said.

However, not every country is willing to talk free and fair trade. Moore's recommendation comes during an ongoing back and forth between the US and China on trade.

"I've made clear our trade imbalance is just not acceptable," Trump charged. "China's market distortions and the way they deal cannot be tolerated."

Back in September, Trump slapped tariffs on $250 billion of Chinese imports. Beijing responded, in turn, with penalties on $60 billion of US products.

Meanwhile, Moore had tough words for China.

"You want to talk about countries that don't play by the rules… China cheats, steals," Moore charged. "They are building up their military; they make it almost impossible to do business over there in China."

The Council of Economic Advisers reports the average American tariff is 3.5 percent, the average EU rate is 5 percent, and China's rate is a whopping 10 percent.

Moore says by offering zero tariffs it allows America to take the high ground and even gain a stronger negotiating position with China to end some of Beijing's most abusive trade policies.

So why are some countries reluctant to get on board with Moore's "zero-for-zero" plan?

"When it comes down to it, a lot of these countries have protectionist impulses and they don't want to open up their markets to us," Moore said.

According to Moore, Great Britain would be the best country to offer this "zero for zero" deal, but they first need to exit from the European Union.

In July, Trump and EU Commission President Jean-Claude Juncker agreed the US and the EU would work towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods. The challenge will be extending that to all goods.

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