Lew: US shouldn’t use spurious security claim for tariffs

HONG KONG: The United States should build a global alliance to tackle China on unfair trading practices instead of using spurious national security claims to impose tariffs that also hurt allies, said former US Treasury Secretary Jacob J. Lew.

Lew said that the United States is in danger of abandoning the global economic order it helped to build.

He also said the United States imposed tariffs on imported goods will drive up prices, drag on investment and confuse the outlook for the Federal Reserve.

“I think that if you continue to bring the world together and put pressure on China to do the right thing it would be more effective than using a kind of spurious claim of national security, Lew said in a Bloomberg Television interview. “It doesn’t make sense.”

President Donald Trump last week threatened to impose tariffs on practically all Chinese imports into America, as the world’s two largest economies exchanged blows in a trade war that isn’t set to end anytime soon.

A 25% levy on US$34bil of Chinese goods entering the United States took effect just after midnight Washington time last Friday with farming plows and airplane parts among the products targeted. China hit back immediately via duties on US shipments including soybeans and automobiles.

Trump is already eyeing the next tranche, on US$16bil of Chinese goods, and he has indicated that the final tariff total could exceed US$500bil, almost the same amount that the United States imported in 2017.

At the same time, Trump is also locked in disputes with other key trading partners including Mexico and the European Union.

“I am not worried when the United States challenges China on legitimate grounds,” said Lew, who served through the end of the Obama administration.

“What I think is wrong is that the United States loses its role as a leader of international norms.” — Bloomberg