Time for Trump to relieve global economy from shackles of tariffs

By Wen Sheng Source:Global Times Published: 2019/9/12 16:42:00

Photo: VCG

Global markets from New York to Frankfort to Shanghai have rallied lately on growing signs of the trade war thawing, orchestrated by China and the US, the two predominant economic powers of the world. 

Now hopes run high that Beijing and Washington may mete out more offerings to reciprocate each other's goodwill and pave a solid way for the resumption of their trade talks in October. 

China offered to waive punitive tariffs on 16 categories of American-made products for as long as 12 months on Wednesday, and we are elated to see Trump administration return the offering with delaying a planned increase in tariffs from 25 percent to 30 percent on US$250 billion worth of Chinese imports from October 1 to October 15. 

US President Donald Trump's twitter post that he decided on the tariffs postponement so as to avoid escalating trade tensions on "the 70th anniversary of the founding of the People's Republic of China" which falls on October 1, is most striking to tens of millions of Chinese people. Nobody wants a trade war to steal the festivity of the upcoming gala fireworks celebration and parade. 

Just hours later, China's Ministry of Commerce reciprocated the goodwill gesture by announcing a more significant move -- that Chinese firms will resume purchasing US agricultural products including pork and soybean, which President Trump has been prodding Beijing to buy because American farmers make up a strong electorate base for him. 

Hopefully, there will emerge more faithfully reciprocal measures by the two superpowers in the next two weeks before high-profile trade talks resume in Washington. Washington and Beijing have the obligations to restrain their spat from exacerbating, and help prevent the global disruption of supply chains from worsening, and arrest the global economy from the precipice of a decimating recession. 

Although American and Chinese economies attained 2 percent and 6.2 percent growth rates respectively for the April-June quarter this year, the downturn pressure facing both is mounting because of the tit-for-tat tariffs war. Economic woes including rising prices, diminishing jobs and shrinking buying power are unnerving many wage-earners, and are the least things US President Trump aspires in his 2020 reelection bid. 

Therefore, the Trump administration needs to change its distorted narrative of the consequences of the trade war, admitting it is now inflicting stinging pain on the US as well. Now, American manufacturing activity is contracting, homes sales and new jobs are declining. 

US Commerce Department reported new home sales dropped 12.8 percent in August year-on-year, marking the biggest monthly drop since 2012. And, according to US polls, President Trump's approval rating has dropped markedly in many 2020 battleground states, including Pennsylvania, Michigan, Ohio and Wisconsin. 

As the trade conflict has been churning the two countries for 16 months, Beijing and Washington know quite well about one another's "bottom lines". So it is time for them to seriously consider trading genuine compromises and seeking a final solution in order to put the trade war nuisances behind them. 

US President Trump still has time to rectify the passiveness and hurtfulness of his trade policy. By calling an end to the trade war, the US economy will get an instant as well as much-needed relief from the shackles of the trade tariffs. Ending the conflict will most likely reward him with a reviving American economy, which will be a blessing for Trump's possibility to stay in the White House for 4 more years.

If the trade envoys from both countries put aside animosity toward each other, settle their differences, trade compromises, and come out with a historical trade deal, then upcoming APEC leaders' summit in Chile in November will be the best time and place to sign the deal. That will be a moment of greatness. 

Posted in: INSIDER'S EYE

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