Trump’s trade tariff moves buck global trend

By Li Hong Source:Global Times Published: 2018/3/11 22:18:39

Illustration: Luo Xuan/GT


Most countries in the world, notably China and Germany - currently the dominant economic powers in Asia and Europe - hold a strong belief that only free trade can help inspire dynamic economies and foster healthy economic growth.

Nevertheless, the US - the dominant economic force in the Americas - now seems determined to buck the trend.

US President Donald Trump announced on March 1 that he would impose tariffs of 25 percent and 10 percent, respectively, on imported steel and aluminum, following earlier moves to impose higher punitive levies on imported washing machines and solar panels.

Trump's unilateral move immediately roiled global markets, rankled US allies and raised prospects for a looming global trade war. On March 4, Trump's White House trade policy advisor Peter Navarro added that no country would be excluded from the US punitive trade measures.

Many are incensed at the Trump administration's unilateral trade punishment of its partners. Not only are China and Germany placed in the crosshairs of Trump, his punitive tariffs will also cover significant steel and aluminum imports from Canada, Mexico, Japan, South Korea, Turkey and EU countries.

Anyone's guess is that if the US chooses a stance against trade and globalization and stubbornly sticks to it, the country is very likely to witness withering trade and more unfriendly trade partners, and probably, an increasingly isolated and flagging economy in the end.

Addressing criticism of his proposed action, Trump tweeted on March 4 that US "steel and aluminum industries are dead. Sorry, it's time for a change!" In another tweet on March 2, he displayed his penchant for engaging in a fight. "Trade wars are good, and easy to win," he boasted.

Receiving a rebuff from European Commission President Jean-Claude Juncker, who later threatened to retaliate with higher duties on imported US motorcycles, blue jeans and whiskey, Trump was enraged and hyped up his rhetoric, vowing to impose stiff tariffs on imported European cars - effectively escalating a messy trade war.

Ironically, Trump's move has drawn applause from US labor unions and American workers who believe Trump will help bring lost jobs back home. But US economists and business groups are warning of dire economic consequences if the Trump administration goes ahead with the tariffs.

The move will inevitably ram up the cost of new appliances, cars and homes, increasing US inflationary pressure. And almost certainly it will trigger its trade partners to launch retaliatory actions, most likely targeting US agriculture, experts say.

"On trade policy, President Trump appears to be listening to advisers with views far outside mainstream economics," said Gregory Mankiw, a Harvard economics professor who was chairman of former US President George W. Bush's Council of Economic Advisors. "I don't know any respected economist, conservative or liberal, who thinks this is the right approach to promoting prosperity."

Some far-sighted US scholars suggest their government in Washington learn from China, which is scheduled to celebrate the 40th anniversary of the iconic reform and opening-up policy in 2018, an occasion when Beijing will launch more opening-up measures to shore up its position as the world's largest trading power.

Chinese Commerce Minister Zhong Shan told reporters at the ongoing two sessions in Beijing that the country will unswervingly stick to forging even closer trade relations with all its partners, solidifying its trade position and contributing to global prosperity. The General Administration of Customs reported China's total trade hit 27.79 trillion yuan ($4.39 trillion) last year, ticking up 14.2 percent year-on-year.

When it comes to trade superiority, the competitiveness of a country's human resources is a very important component. In this perspective, the unusual labor force strength of Germany and China - in terms of work skills, craftsmanship and diligence - backs up their success in global commerce and prosperity.

In 2016 and 2017, China and Germany were each other's largest trade partners, and their aggregate trade volume is poised to climb to new heights thanks to the two countries' steadfast pro-trade and opening policies.

China and Germany are currently the dominant economic powers in Asia and Europe, respectively, and their governments have vowed to stick to freer trade and steadfastly uphold globalization.

Pundits say that trade on mutually beneficial terms always works to improve living standards for rich and poor countries alike, by increasing people's access to resources, technologies, jobs, credit, better infrastructure and streams of new opportunities to be created by the movement of commodities, services and people. An ancient Chinese proverb goes: "Running water won't stink and a door-hinge never gets worm-eaten." If the US continues on the wrong path, whether it will stink or fall prey to worms is unknown.

The author is an editor with the Global Times.


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