Ne­go­ti­a­tion, not use­less tar­iff threat, is way for­ward

China Daily European Weekly - - Comment - Chen Wei­hua The au­thor is deputy ed­i­tor of China Daily USA. Con­tact him at chen­wei­hua@ chi­nadai­

US Pres­i­dent Don­ald Trump and Com­merce Sec­re­tary Wil­bur Ross both tried to calm the panic about a pos­si­ble trade war on April 4, just hours af­ter China slapped 25 per­cent tar­iffs on $50 bil­lion (41 bil­lion eu­ros; £36 bil­lion) in im­ports from the United States, in­clud­ing soy­beans, whiskey, cars and planes.

Trump tweeted on the morn­ing of April 4 that “we are not in a trade war with China”, while Ross told CNBC that he ex­pects trade ac­tions be­tween the two coun­tries will likely lead to a ne­go­ti­ated deal. Larry Kud­low, di­rec­tor of the White House Na­tional Eco­nomic Coun­cil, in­di­cated it’s pos­si­ble that Trump’s tar­iffs are a ne­go­ti­at­ing tac­tic and won’t go into ef­fect.

If this were the case, then Trump has al­ready proved him­self wrong, be­cause China has demon­strated that it can’t be co­erced and is fully de­ter­mined to re­cip­ro­cate, as re­flected in both the Sec­tion 301 and the Sec­tion 232 cases. Wield­ing a big tar­iff stick won’t gain US more lever­age at the ne­go­ti­a­tion ta­ble.

By threat­en­ing pro­tec­tion­ist tar­iffs, Trump has caused a ma­jor dis­rup­tion in the global trad­ing sys­tem and also put Amer­i­cans in harm’s way. US con­sumers, farm­ers and bluecol­lar work­ers, many of whom voted for Trump, have been hurt al­ready as a re­sult of the tar­iff war trig­gered by the Sec­tion 232 steel and alu­minum tar­iffs. The dam­age will be much big­ger if the tit-for-tat tar­iffs sparked by the Sec­tion 301 case take ef­fect.

China has long called for ne­go­ti­a­tions to re­solve bi­lat­eral trade and in­vest­ment is­sues. So if the Trump ad­min­is­tra­tion is open to ne­go­ti­a­tion, as it in­di­cated, it should im­me­di­ately stop the tar­iff stick and start ne­go­ti­a­tions with China.

Ne­go­ti­a­tions, whether through the China-US Com­pre­hen­sive Eco­nomic Di­a­logue, the Joint Com­mis­sion on Com­merce and Trade or other plat­forms, will be a much bet­ter way to ad­dress each other’s con­cerns than threat­en­ing a tit­for-tat tar­iff war.

Yes, ne­go­ti­a­tions may not be a smooth process and will not solve all the prob­lems or solve them in a short pe­riod of time. That is just the na­ture of many com­pli­cated is­sues in big coun­tries like China and the US.

China has long called on the US to loosen and lift its re­stric­tions on US high-tech ex­ports to China. The US has not only failed to ad­dress it ef­fec­tively, but rather moved in the op­po­site di­rec­tion, with more dis­crim­i­na­tive poli­cies against China, both in trade and in­vest­ment.

And it’s im­pos­si­ble for the US to de­mand that China, the largest de­vel­op­ing coun­try, solve its prob­lems overnight, even if it’s in China’s best in­ter­est.

What is im­por­tant is that China is mov­ing in the right di­rec­tion. It has been steadily im­prov­ing its pro­tec­tion of in­tel­lec­tual prop­erty rights, a key ele­ment for China to move into an in­no­va­tion-driven so­ci­ety.

Chi­nese lead­ers have pledged fur­ther re­form and open­ing-up. Pres­i­dent Xi Jin­ping is ex­pected to roll out new re­form and openingup mea­sures at the Boao Fo­rum for Asia to be held in Hainan Is­land from April 8 to 11.

Af­ter all, this year marks the 40th an­niver­sary of China’s re­form and open­ing-up drive, which has brought phe­nom­e­nal progress in China and also ben­e­fited the whole world, in­clud­ing the US. It’s in China’s own in­ter­est to con­tinue to re­form and open up.

So it’s re­ally time for Trump to give up the use­less tar­iff weapon and come to the ne­go­ti­a­tion ta­ble.

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