By Zhang Hongpei Source:Global Times
The US on Tuesday delivered on its threat to impose a 25 percent tariff on $16 billion worth of Chinese goods, forcing China to retaliate with the same tariff rate on the same value of goods from the US, China’s Ministry of Commerce (MOFCOM) announced late Wednesday. Both sets of tariffs will take effect on August 23.
The US-provoked tit-for-tat tariffs are bound to seriously damage the US economy as it continues to wield its tariff stick, which has upended previously mutually beneficial China-US trade relations and allowed acrimony to become the new normal, experts told the Global Times.
The unreasonable moves by the US have once again allowed its national laws to supersede long-standing international laws, MOFCOM said.
The Office of the US Trade Representative announced Tuesday that it will impose a 25 percent tariff on $16 billion worth of Chinese goods, according the office’s website.
This latest round of tariffs come after the first tranche of tariffs, on approximately $34 billion of imports from China, took effect on July 6. In June, US President Donald Trump announced his administration would impose tariffs on $50 billion worth of Chinese goods.
The new set of tariffs contains 279 items, including electronic, plastic and chemical products and other industrial compounds such as machine parts and accessories and devices used in the manufacturing of semiconductors and electronic integrated circuits.
The original list contained 284 items, and the five items removed from the list involve such products as shipping containers, floating docks and saws used in timber mills. USTR removed these items from its original list after a 46-day public comment and review period found they would cause “severe economic harm,” Reuters reported on Wednesday.
This adjustment came after the US government received input from its powerful industry associations and organizations and reflects the country’s own internal economic pressures, experts said.
Diao Daming, an American studies expert and associate professor at Renmin University of China, said the US is attempting to manage the damage inflicted by the tariffs.
“Given the current figures the US economy is performing at its peak, but a declining trend is ahead,” predicted Diao in an interview with the Global Times on Wednesday.
This fiscal year, US debt is estimated to reach 107 percent of GDP, while its deficit is likely to grow 25 percent year-on-year, said Diao, adding that the country’s economic development is being weighed down by its trade policies, which are likely to become even more draconian.
On July 11, the US announced tariffs on $200 billion worth of Chinese goods. The rate was announced at 10 percent, but since upped the ante by threatening to increase the tariff rate to 25 percent.
“If that tariff rate is imposed, it will damage both sides, especially US consumers as the threat is likely to hit consumer goods hard,” said Diao, adding that China will have no choice but to respond with similar tariffs on US goods.
Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges, told the Global Times on Wednesday that the growing trend for the tit-for-tat trade war by the world’s two largest economies is hard to predict.
“The new round of tariffs is scheduled to be imposed [on August 23], but it usually takes two or three months to fully evaluate the impact,” Wang said, noting that effect will be felt around the time of the US mid-term elections in early November.
While trade frictions escalate, the People’s Daily, the flagship newspaper of the Communist Party of China, published a front-page article on Wednesday to encourage Chinese people to be confident they can overcome the coming challenges.
The article titled “Storms cannot stop the will to create a better life,” looks back on the history of the People’s Republic of China, citing examples of victories and achievements the nation made to encourage the public not to lose confidence when difficulties occur.
The article expressed firm confidence in the ability and legitimacy of the country and its people to seek better lives in the future, and that “the hegemony and protectionism” are aimed at stopping China and its people from reaching this legitimate goal.
“Those people who build high tariff walls and wave the stick of hegemony” are standing on the wrong side of history, and “in the end they will drop the rock that hurts their own feet,” the article said.