US President Donald Trump has requested the US Trade Representative (USTR) to identify a new list of $200 billion of Chinese goods for slapping additional 10 percent tariffs. Last week, the US announced a 25 percent tariff on up to $50 billion of Chinese products, which prompted Beijing’s retaliatory tariffs on US goods. Trump threatened that the new duties will go into effect if China insists on going forward with the new tariffs that it has recently announced, and if Beijing takes new retaliatory steps against the tariff on $200 billion worth of goods, the US will identify another $200 billion products for additional duties.
It is clear that Trump wants to intimidate China, forcing it to accept US tariffs last week and give up the new retaliatory duties that Beijing recently announced.
China doesn’t want to engage in a trade war with the US. It didn’t force sanctions on the US and its announcements of tariffs are responses to Washington’s unreasonable duties on Chinese products, which violate WTO principles.
China-US trade is conducted under multilateral trading rules, and the US was playing the leading role when the rules were established. The US’ low saving rate and restrictions on high-technology exports to China all contribute to its large trade deficit.
China has been active in resolving the trade imbalance and the two sides reached a series of consensus after three rounds of talks. But Trump’s unreasonable decision to impose a 25-percent tariff on $50 billion of Chinese exports goes against the logic of dispute settlement and has taken China, US society and the world by surprise.
Trump’s latest statement indicates that he wants to launch a trade war on China and control its scale by forcing Beijing not to strike back. In this way, he can show off his capability and prove that his hardline approach works, in addition to showing that he is the unrivaled choice for president so that he can please US voters as much as possible.
The US leader is gambling. He hopes China will tolerate his capricious and obstinate attitude, and endure threats with a view to placate the US to avoid more losses coming. Thus Washington would have full control on how the trade war ends.
But the world doesn’t run this way. Shortly after Trump’s latest threat, China’s Ministry of Commerce said that if the US acts irrational and unveils another list of Chinese products for additional tariffs, China will have no choice but to take comprehensive measures combining quantitative and qualitative ones to resolutely strike back.
This is how a power like China is supposed to respond. It would be upsetting if Trump believes that Beijing will tolerate what the US has done to it. No one can put up with unreasonable US tariffs, be it China, Europe, Canada or Mexico.
Not only the Chinese government, but also the whole Chinese society cannot accept the US trying to blackmail China. We cannot accept that the US unilaterally define China-US relations in violation of basic international norms, nor can we allow it to establish trade hegemony overriding the current international trading system and interests of other nations.
The Trump administration’s gambling not only jeopardizes the interests of the Chinese people, but also bets on the interests of the US public. The prosperity and wealth of the US are largely linked to the global economic network. It cannot benefit from disrupting the international economic order.
It is US arrogance to believe that a trade war will exhaust China. But the boot is on the other foot. Trade is mutually beneficial to both the US and China. Scuppering bilateral trade would cause similar suffering to both sides. This simple truth can never be wrong.
Posted in: EDITORIAL