US economy cannot sustain its bullying policy

Source:Global Times Published: 2019/8/16 16:58:48

Photo: GT

China will take necessary measures to counter Washington's decision to impose tariffs on an additional $300 billion of Chinese products earlier this month, the Customs Tariff Commission of the State Council said Thursday, following a phone call between top negotiators of the China-US high-level economic and trade talks on Tuesday. This shows the China-US trade talks deadlock has not yet been broken. The US' recent announcement that it would delay tariffs on some of the Chinese products did not impress Beijing.

China requests that the US cancel the entire new tariff threat, as it is a serious violation of the consensus reached by the two heads of state in Argentina last December, and in Osaka in June this year. The US has taken a big step forward in the tariff war, followed by a small step back. It is asking China to accept the remaining threat, in return for China's purchase of US agricultural products. This is a tactic that Beijing cannot accept.

The US has repeatedly boasted about how strong its economy is, and how its massive tariffs on Chinese products have yielded rich results. But these lies will not scare the Chinese, nor will they fool many Americans as the laws of economics are clear. A trade war is a lose-lose game between China and the US; it is not a game that the US will win unilaterally.

US stocks have fallen sharply twice in recent days, taking a particularly severe hit on Wednesday, and the 2-year/10-year Treasury bond yield curves inverted. The latter in particular is to be an early signal of economic recession, and is widely regarded as an ominous sign.

The trade war with China would accelerate a US recession. This is seemingly the conclusion of the US and global economic communities. It is now widely believed that negative consequences are not a theoretical probability, but real and inevitable.

Hard-line policymakers in Washington believe, even more so, that these consequences are inevitable. But they pretend to be confident and promote the illusion that the more it fights a trade war, the better the US will do. They try to fool China, to deceive American voters, and aim to finally achieve their goal of intimidating China.

Unfortunately, they chose the wrong opponent. They have seriously overestimated the deterrent power of a tariff war. They think China will raise the white flag if the US imposes maximum pressure on China.

However, China has been consistent in its attitude: We do not want to fight a trade war, but we are not afraid of it, and we will fight when necessary. China has always wanted to reach a deal, but has never hesitated to reject an unfair deal. Our current attitude is the same: It is good for both sides to reach an agreement early, but if the US side only wants a deal that it can win unilaterally, we can just wait. It matters little how long it takes.

We admit that the trade war has hurt China's economy, and we are actively working to reduce the extent of that damage. We are fully confident that the Chinese economic system is capable of doing so.

We have seen the US tries to ignore the damage of a trade war by deceiving itself. We are surprised at how blatantly a government can falsify things in such an era. But this is America's problem; let the laws of economics punish them.

Various problems are gradually encircling the US government. There has always been a path for the US government that leads to a real negotiating table. But opening this doorway requires a key - a key which is equality and mutual respect.

Posted in: EDITORIAL

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