US tariff threat will backfire, hurt global industry chain
- Author: Zachary Reyes Apr 11, 2018,
Apr 11, 2018, 9:36
Trade tensions between the United States and China were ratcheted up another notch yesterday and could turn into a full-blown trade war if the Trump administration follows through on its threat to impose $100 billion in new tariffs on Chinese imports, a former ambassador to China said.
Earlier this week, the President announced new tariffs on $50 billion worth of Chinese goods imported into the U.S. Beijing responded with its own tariffs, of $50 billion on imported U.S. goods. The best way to strengthen our negotiating position with China is to re-engage with trading partners in that region, specifically those in the Trans-Pacific Partnership (TPP).
And the former governor of the Bank of Japan, Masaaki Shirakawa, drew parallels with the trade dispute between the USA and Japan in the 1980s, when the United States complained about the huge trade deficit and pressed Japan to revalue its currency.
"We can't allow China, which is a first-world country now and has to play by the rules, to steal our technology".
The possibility of a trade war also comes as the Trump administration prepares to meet next month with North Korean leader Kim Jong Un about ending his illicit nuclear weapons program.
"Instead of tariffs, we strongly encourage the administration to build an global coalition that can challenge China at the World Trade Organization and beyond", Garfield added. The markets are anxious that this rhetorical escalation could lead to an all-out trade war.
Navarro said Friday that high-level talks will take place before any tariffs will take effect, led by Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.
He added: "Taxes will become reciprocal and a deal will be made on intellectual property". It also added that the United States was "one of the biggest beneficiaries" of this arrangement. The US levies have to wait for a 60-day period of public talks, and Beijing said their duties would come into force at the same time.
"If you want to spare the consumer so you don't get this massive backlash against your tariffs, then there goes manufacturing, because that's what's left", said Monica de Bolle, an economist at the Peterson Institute for International Economics. "Well it's gonna affect the ag economy, it's going to take money out of our pockets, we are already in a really tight profit margin right now", said Joe White, an Elburn farmer who has about 1,000 acres, 600 of corn and about 400 of soybeans. "We're just looking for our companies and our workers to have a level playing field".
It is considered one of the most powerful weapons in Beijing's trade arsenal given the impact on Iowa and other farming states that backed Donald Trump in the presidential election. They can not continue to break the laws of trade as they have for over 20 years.
"It is generally said that the Chinese can take more pain - that's probably true", he said.
Meanwhile, He-Ling Shi, an associate professor at the Department of Economics at Monash University, believed the trade war would be unlikely to eventuate.