US should come to its senses, stop pushing for trade war
Along with the package of tariffs and investment restrictions it is reportedly planning as punishment for what it alleges are China’s violations of US intellectual property laws and pressuring of US companies to transfer technology, the Trump administration is also considering limiting the number of visas issued to Chinese students, according to The Wall Street Journal. The move comes after the director of the FBI accused Chinese students and researchers in the United States of being covert information collectors, spies in other words, and after Washington announced it will impose stiff tariffs on steel and aluminum imports from China.
So far, Beijing’s response to these moves has been rather subdued. Vice-Foreign Minister Zhang Yesui said recently that China will take “necessary measures” if its interests are harmed, but knowing how important a healthy trade relationship is to the bigger picture of bilateral ties, Beijing has so far chosen to keep its powder dry in the belief that once the rain has gone the sky will brighten.
For it hopes that the Trump administration will come to its senses and realize that the unilateral measures it is proposing to take against Chinese imports stand little chance of hurting China without harming the US, since the cost-advantaged imports the tariffs target benefit US manufacturers in upstream industries and US consumers.
The restrictions on students’ visas, meanwhile, as well as giving substance to suspicions that are so far-fetched and unfounded they hint at paranoia, will also be counterproductive, given that Chinese students account for about one-third of the 1.1 million international students enrolled in US universities. Ironically, given Washington’s fixation on its trade deficit with China, the US actually has a surplus in education, an industry that is worth tens of billions of dollars to the US. Chinese students and scholars, who contribute so much to US science and innovation, are simply being made scapegoats in the Trump administration’s confrontational reframing of the US’ engagement with China.
In contrast to the shortsightedness of its politicians, much of the business community in the US has remained clear-minded and it is cautioning Trump that by upsetting the nest he risks breaking the eggs for everyone.
Trump should heed these words of caution and stop trying to blame others for ills that are of the US’ own making.
It is 10 years since the shock waves of the subprime crisis in the US spread around the world and the global economy is only now beginning to recover. The ever-growing interdependence between the world’s top two economies means tit-for-tat trade blows between them would create even greater risks for themselves and the global economy.