PH to US, China: Exercise restraint, resume dialogue to avoid trade war
The Philippines called on the United States and China to exercise restraint and resume dialogue to prevent a fullblown trade war and its devastating impact on world economy as investors around the globe brace for uncertain markets.
Philippine Ambassador to China Jose Santiago Sta. Ana has cautioned that there would be “no winners” if the trade skirmish between the world’s biggest economies escalates, adding the Philippines will be among the nations that will be affected.
“If a trade war breaks out, usually generally speaking there
are no winners and it is a hard for any winner to emerge and so we will also be affected,” Sta. Romana said during a media interview ahead of the Boao Forum for Asia annual conference in Hainan. ”What we need to do is to call on restraint on the US and China to go back to the negotiating table, to open talks and try to resolve through negotiations, trade talks so as to avert a trade war and so as to prevent any fallout on the Philippines,” he added.
But President Donald Trump tried to downplay fears of a trade dispute between the US and China, suggesting that Beijing will ease trade barriers “because it is the right thing to do” and that the economic superpowers can settle the escalating conflict.
But as Trump tried to project confidence that a dispute that has rattled financial markets, consumers and businesses can be resolved soon, his top economic advisers offered mixed messages as to the best approach with China. Beijing has threatened to retaliate if Washington follows through with its proposed tariffs, even as Trump emphasized his bond with Chinese President Xi Jinping.
We’re friends “President Xi and I will always be friends, no matter what happens with our dispute on trade,” Trump tweeted Sunday. “China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”
But Trump did not explain why, amid a week of economic saber-rattling between the two countries that shook global markets, he felt confident a deal could be made.
The conflict started after the US introduced tariffs on aluminium and steel imports, which has been widely considered a punishment on China for allegedly stealing US technology.
Being hit back by increasing tariffs by up to 25 percent on over a range of US goods, including soybeans, aircrafts and autos. In light of China’s supposed unfair retaliation, US President Donald Trump directed trade officials to consider $100 billion in additional tariffs on China.
Effect on PH exports According to Sta. Romana, the Philippines’ export industry could be adversely affected from the trade dispute between the superpowers.
He noted that some of the local exports are part of the supply chain of China’s exports to the United States. “There is a gonna be a negative impact on us and that’s why so we are very concerned about it,” he said.
He said the Boao Forum for Asia, an annual international dialogue on solutions and innovations for more open and better global trade, was very significant to attract international attention to prevent the escalation of the trade conflict between the United States and China.
Anticipation is high on the policy statements that will be delivered by Chinese President Xi Jinping and Philippine President Rodrigo Duterte at the opening of the Boao Forum, he added.
He said there was a “need to keep the markets open, the need for globalization, as well as the need for preventing the protectionism to advance further and this is are lady a growing threat that is looming on our heads..
“I think what we don’t want to see is to be adversely affected and it is going to be a challenge,” the Filipino envoy said.
Fixing trade imbalance
President Trump made fixing the trade imbalance with China a centerpiece of his presidential campaign, where he frequently used incendiary language to describe how Beijing would “rape” the US economically. But even as Trump cozied up to Xi and pressed China for help with derailing North Korea’s nuclear ambitions, he has ratcheted up the economic pressure and threatened tariffs, a move opposed by many fellow Republicans.
The Trump administration has said it is taking action as a crackdown on China’s theft of US intellectual property. The US bought more than $500 billion in goods from China last year and now is planning or considering penalties on some $150 billion of those imports. The US sold about $130 billion in goods to China in 2017 and faces a potentially devastating hit to its market there if China responds in kind.
‘Counterattack with great strength’
China has pledged to “counterattack with great strength” if Trump decides to follow through on his latest threat to impose tariffs on an additional $100 billion in Chinese goods – after an earlier announcement that targeted $50 billion. Beijing also declared that the current rhetoric made negotiations impossible, even as the White House suggested that the tariff talk was a way to spur China to the bargaining table.
The new White House economic adviser, Larry Kudlow, said Sunday that a “coalition of the willing” – including Canada, much of Europe and Australia – was being formed to pressure China and that the US would demand that the World Trade Organization, an arbiter of trade disputes, be stricter on Beijing. And he said that although the US hoped to avoid taking action, Trump “was not bluffing.”
“This is a problem caused by China, not a problem caused by President Trump,” Kudlow said on “Fox News Sunday.”
But he also downplayed the tariff threat as “part of the process,” suggesting on CNN that the impact would be “benign” and said he was hopeful that China would enter negotiations. Kudlow, who started his job a week ago after his predecessor, Gary Cohn, quit over the tariff plan, brushed aside the possibility of economic repercussions.
“I don’t think there’s any trade war in sight,” Kudlow told Fox.
Treasury Secretary Steve Mnuchin said on CBS’ “Face the Nation” that he didn’t expect the tariffs to have a “meaningful impact on the economy” even as he left the door open for disruption. He allowed that there “could be” a trade war but said he didn’t anticipate one.
Another top White House economic adviser, Peter Navarro, took a tougher tack, declaring that China’s behavior was “a wakeup call to Americans.”
“They are in competition with us over economic prosperity and national defense,” Navarro said on NBC’s “Meet the Press.” “‘Every day of the week China comes into our homes, our business and our government agencies . ... This country is losing its strength even as China has grown its economy.”
Rising economic tension Trump’s latest proposal intensified what was already shaping up to be the biggest trade battle in more than a half century.
Trump told advisers last week that he was unhappy with China’s decision to tax $50 billion in American products, including soybeans and small aircraft, in response to a US move to impose tariffs on $50 billion in Chinese goods. Rather than waiting weeks for the US tariffs to be implemented, Trump backed a plan by Robert Lighthizer, his trade representative, to seek the enhanced tariffs.
The rising economic tensions pose a test to what has become Trump’s frequent dual-track foreign policy strategy: to establish close personal ties with another head of state even as his administration takes a harder line. President Trump has long talked up his friendship with Xi, whom he has praised for consolidating power in China despite its limits on democratic reforms.
Further escalation could be in the offing. The US Treasury Department is working on plans to restrict Chinese technology investments in the US. And there is talk that the US could also put limits on visas for Chinese who want to visit or study in this country.
For Trump, the dispute runs the risk of blunting the economic benefits of his tax overhaul, which is at the center of congressional Republicans’ case for voters to keep them in power in the 2018 elections. China’s retaliation so far has targeted Midwest farmers, many of whom were bedrock Trump supporters.