US trade coercion moves must be abandoned

By Li Hong Source:Global Times Published: 2018/5/23 21:58:42

Illustration: Luo Xuan/GT



The US and China have pulled back from the brink of a potentially nasty trade war, following several rounds of intensive negotiations in Beijing and Washington.

Still, Beijing cannot order Chinese importers to buy more goods from the US at the sacrifice of those from other smaller economies, because that would run counter to global free trade rules and inhibit other economies.

For example, German- and Japanese-made cars are globally known for their higher quality and fuel-efficiency, as compared with US-made vehicles. China simply cannot command vast numbers of its consumers to stop buying German and Japanese cars and shift to buying US ones instead. Markets don't work that way.

Trade between different economies in essence is an exchange of one another's advantages. The US has advantages in agriculture and high-tech production, including churning out supercomputers and integrated circuits, while China is broadly recognized as an industrial manufacturing powerhouse.

If the US imposes restrictions on its technology exports to China, while asking China to buy more US cars, soybeans, sorghum, fruit and beef, it won't be easy to narrow the trade gap.

Also, economists in both countries believe that most US households consume too much, devouring all types of commodities at malls, in contrast to average Chinese families who tend to deposit more in the bank, which adds to the difficulty in reducing the bilateral trade gap. Some have even pointed out that the low deposit rate in the US poses a fundamental peril that could dent the health of the world's largest economy. Americans need to spend less and save more.

Even though the Trump administration has agreed to "hold" off on a trade war with China, the scars have been left. Whether these will heal depends on future moves by the governments, Washington especially.

For a long time, many Chinese believed that the China-US relationship was by all definitions the most important bilateral ties in the world, for the two largest economies could always be on good and cooperative terms and engage each other in working out business-friendly policies to benefit the people of both countries and other economies as well.

However, the coercive and ruthless trade tactics that the Trump administration launched on China in the past two months has shattered the long-cherished beliefs held by many ordinary Chinese.

The Trump administration constantly raised the magnitude and range of Chinese goods subject to punitive high tariffs - from $50 billion to $150 billion - which seemed extreme.

The US Commerce Department's imposition of a seven-year ban on exports to China's No.2 telecom equipment maker, ZTE, effectively putting the jobs of its 80,000 workers in danger, was hard to accept in the eyes of Chinese people. To make things worse, the explicit demands made by some US officials for China to alter the acclaimed Made in China 2025, which aim at accelerating high-tech exploration and growth in China, distressed many well-educated middle-class Chinese. They have for a long time pinned their hopes on industrial and technological modernization in the country to create higher-paying jobs for themselves and their children, who are studying hard at school.

Many Chinese people, scarred by the latest trade skirmish, truly hope that Washington never resorts to high tariffs and trade war tactics again. Negotiations in goodwill are always better than blunt weapons in resolving economic disputes, and co-prosperity is the common goal of both peoples. Coercion should be abandoned.

The author is an editor with the Global Times. bizopinion@globaltimes.com.cn



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