Trade war: Extent of US-China trade fight depends on Trump's goals
- Author: Leroy Wright Mar 26, 2018,
Mar 26, 2018, 20:04
United States President Donald Trump on Thursday imposed massive trade tariffs amounting to Dollars 60 billion on China, in a move that could escalate into a global trade war, given the accelerating trade tensions between the two countries.
"Beijing is extending an olive branch and urging the U.S.to resolve trade disputes through dialogue rather than tariffs", said economist Vishnu Varathan of Mizuho Bank in a report.
But the statement stressed that the US should "pull back from the brink" and avoid the world's two largest economies locking horns in a trade war.
Alarm over Trump's protectionist leanings mounted earlier this month after he imposed hefty import tariffs on steel and aluminum under Section 232 of the 1962 U.S. Trade Expansion Act, which allows safeguards based on "national security".
Mr Trump is planning to impose the tariffs over what his administration says is misappropriation of U.S. intellectual property.
He added: "This flows from its fundamental strategy that it is against a trade war but will defend itself if, against its wishes, it is attacked".
The talks, which cover wide areas including financial services and manufacturing, are being led by Liu He, China's economic czar in Beijing, and U.S. Treasury Secretary Steven Mnuchin and U.S. trade representative Robert Lighthizer in Washington. This is due to simple fund liquidation, but the market is also wary of growing tensions between major US trading partners. Trump believes China has pressured USA companies to hand over their technology ideas and businesses.
"We request that China immediately halt implementation and revise these measures in a manner consistent with existing worldwide standards for trade in scrap materials, which provide a global framework for transparent and environmentally sound trade in recycled commodities", the USA spokesperson noted, at the WTO Council for Trade in Goods session in Geneva. "If there's a trade war between the U.S. and China, don't blame Donald Trump: China started it long before he became president", the daily wrote.
"If the Trump administration really wanted to hurt China and start a trade war, then they would go after those larger sectors", he said.
On Friday, it unveiled a list of $3 billion worth of U.S. goods, including pork, fruits and wine, that could be targeted with tariffs in retaliation for steel and aluminium tariffs - if negotiations fail.
"China is not going to want to come to the negotiating table from a position of weakness", said Claire Reade, former USTR chief counsel for China trade enforcement.
China pledged yesterday to press ahead with market opening and reforms while reiterating that it will treat domestic and foreign firms equally and protect intellectual property rights.
The president opted for new trade barriers after sounding out officials in Beijing about a potential deal, the official said.
Henry Paulson, the US treasury secretary at the time, is said to have asked Wang Qishan, then Chinese vice premier in charge of financial affairs, to buy USA government bonds. "Use Chinese products and support our country".
But Jackie Wang, an aluminium analyst at consultancy CRU in Beijing, said the impact of any trade action on USA aluminium scrap imports would be very limited.
Critics also warned that unilateral action by the United States squanders an opportunity to put global pressure on China for practices that are widely criticized by other countries.
"There's very little evidence that China's actual behavior was changing for the better", the official said.
It also would take a lot more than tariffs on $60 billion worth of exports from China to inflict significant pain on the government, Scissors said.