Trade bul­ly­ing self-de­struc­tive

China Daily (USA) - - COMMENT -

THE LAT­EST PRO­POSED TAR­IFFS from the Trump ad­min­is­tra­tion un­der­line its trade bul­ly­ing and add fuel to the spi­ral­ing ten­sions in the trade war be­tween the United States and China. Xin­hua News Agency com­ments:

The Trump ad­min­is­tra­tion’s ef­forts to slap tar­iffs on China and other ma­jor trad­ing part­ners are des­tined to meet with re­tal­i­a­tion world­wide as it con­tin­ues to dis­re­gard the global rules, in­ter­na­tional sup­ply chains and the mul­ti­lat­eral trade frame­work.

The an­nounce­ment on Tues­day that it is plan­ning to im­pose tar­iffs on an­other $200 bil­lion worth of Chinese im­ports, mainly agri­cul­tural and con­sumer prod­ucts, in ad­di­tion to the tar­iffs im­posed last week on Chinese goods worth $34 bil­lion, has fur­ther es­ca­lated the trade con­flict be­tween the world’s two largest economies.

The Trump ad­min­is­tra­tion’s ac­tions are il­le­git­i­mate and ill­grounded. It is us­ing Sec­tion 301 of the Trade Act of 1974, a one-sided tool that was born and bred in the Cold War era that has been banned by the World Trade Or­ga­ni­za­tion, to which Wash­ing­ton had once pledged to com­mit.

The hawks in­side the Trump ad­min­is­tra­tion seem to ex­pect their tar­iffs to break the global sup­ply chains re­sult­ing in re­turn of pro­duc­tion to the US. Nei­ther ex­pec­ta­tion will be met, as shown by the US mo­tor­cy­cle maker Har­ley-David­son an­nounc­ing it is mov­ing more of its pro­duc­tion over­seas. Global in­vestors will vote with their feet for lower costs and higher ef­fi­ciency in the in­ter­ests of their share­hold­ers.

Even if the Trump ad­min­is­tra­tion re­ally gets its way by dis­turb­ing the cur­rent global sup­ply net­work, the so­phis­ti­cated in­dus­tries, suf­fi­cient la­bor force and snow­balling mid­dle­class mar­ket in Asia will war­rant a re-in­te­gra­tion of sup­plies in­side the re­gion.

In sharp con­trast to the nose­div­ing of US pop­u­lar­ity among in­vestors since the Trump ad­min­is­tra­tion an­nounced tar­iffs, China’s re­cent com­mit­ment to fur­ther re­form and open­ing-up has been at­trac­tive to Tesla and BMW.

Tesla has an­nounced it will open its first over­seas plant in Shang­hai, with a planned an­nual ca­pac­ity of 500,000 elec­tric cars. BMW is also re­port­edly think­ing about ex­pand­ing its in­vest­ment in China. The Ger­man au­tomaker has warned that the US tar­iffs on im­ported mo­tor ve­hi­cles would fur­ther switch off for­eign in­vest­ments and do­mes­tic jobs.

Wash­ing­ton has over­promised and then un­der­de­liv­ered on its com­mit­ment to free trade. But its mis­con­duct will not go unchecked. From China to Europe, from Mex­ico to India and Rus­sia, its tar­iff tricks have par­a­lyzed trade con­sul­ta­tions, and made Wash­ing­ton an ob­ject of re­sent­ment and de­ri­sion.

The tar­iffs also mean US com­pa­nies and cit­i­zens will pay more, and re­sult in choked do­mes­tic in­vest­ment and con­sump­tion. US en­ter­prises, peo­ple in the US and the US econ­omy are go­ing to feel the pain of the Trump ad­min­is­tra­tion’s will­ful­ness.

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