Disintegrating US partnerships with allies can be China’s counterattack to trade tariffs

By Hu Weijia Source:Global Times Published: 2018/3/25 22:43:39

When US President Donald Trump increased tariffs on some commodity imports, a number of US allies felt uneasy. It's time for China to widen its circle of friends to fight the rising tide of US protectionism.

The White House announced late Thursday that Australia, Brazil and some other countries would be temporarily exempt from the tariffs on steel and aluminum that went into effect Friday, but Trump has thus far denied an exemption to Japan, which is the second-largest steel exporter in the world. The US ranked seventh as a destination for Japan's steel exports, according to the International Trade Administration. US tariffs on steel will cost jobs in its close ally if Japan cannot be exempted.

Japan, as well as other US allies, will also be indirect victims of Trump's tariffs and trade-war stance toward China. Since Asian economies are deeply interdependent and a high-value production chain has been established among most countries in the region, US import tariffs against China will hurt sales of materials from countries such as Japan and South Korea, which make components of the products assembled in China.

US relations with its allies are at a complex and sensitive stage. On the one hand, these countries have felt pressure from Washington due to Trump's "America First" policies. On the other hand, they may want to take a wait-and-see attitude if a full-blown trade war can prompt China to further open its market. It is over-optimistic to say US allies will stand side by side with China during the trade war, but a rise in protectionism in the US has split the Western camp and China can take advantage of this opportunity.

As Trump becomes more and more aggressive in his trade measures toward China, Beijing has various options to strike back at the US. But this is not the whole story. Disintegrating the US alliance system, which suppresses China's exports, and enhancing cooperation with US allies will be an indispensable part of China's efforts as Beijing mulls a counterattack in the trade war.

China is the largest trading partner of some US allies. If China's imports of some products from the US, such as integrated circuits, fall due to possible countermeasures during the trade war, the country can easily fill the gap with imports from Japan, South Korea and European countries. China and some US allies have extensive common interests and broad scope for cooperation. This can serve as a weapon in the hand of Beijing to fight the rising tide of US protectionism.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

Posted in: EYE ON ECONOMY

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