US trade war gamble to cause grave impairment for its uncertain, chaotic destiny

By Li Hong Source:Global Times Published: 2019/11/24 18:38:41

Illustration: Luo Xuan/GT

The Trump administration's rogue trade war against China is causing a distressful cold result - anemic economic growth everywhere, with the US' own growth expected to be pulled down to 2.4 percent for 2019 from a 3.3 percent rise a year ago. 

If Washington holds on to the trade war of mutual attrition, the US' growth is likely to dive to around 1.5 percent in 2020. In its strategic squeeze against China's surging global standing, the current US government risks digging a perilous hole for itself. 

China's economy has more resilience. Unless something goes terribly wrong in China, no other nation will wish to decouple from China's colossal market of up to 1.4 billion consumers. 

A novelist knows best that a person's character decides his or her destiny. A country's policies - unilateralism and protectionism versus multilateralism and free trade - decide the country's future. The Trump administration's trade war gamble is to cause grave harm to the US. 

In history, Washington has earned global notoriety for taming the runners-up. It has fought hot wars to defeat Spain and Britain, fought a cold war to send the Soviet Union into oblivion, and won over Japan and the EU in fierce economic tussles, relying on the US' hegemonic coercion. 

China's top leadership believes its country's economy is akin to a cruising ship sailing in the high seas, not a small boat wobbling in a rainstorm. After the trade war enters its 17th month, China has gained more self-esteem to prevail it. 

Even if China's economic growth is pushed down to 6.2 percent this year from 6.6 percent in 2018, the authorities in Beijing seems to have ample confidence in steering the country to weather the trade war by tapping a moderate fiscal stimulus and higher-level of opening-up, as well as realigning closer with the world's other major economies.

In sharp contrast to Washington, Beijing follows a different philosophy - centering on cooperation and a win-win basis. 

When looking at technological innovations for an example, China's leadership believes that all the people around the world should be able to use advanced technologies. Huawei's 5G solutions, China's innovative high-speed train system and its newest civilian nuclear power reactors, among other technologies, ought to be introduced on a fast track to all foreign markets in order to create the most wealth and benefit the most people.

And, the US government's current attempt to treat its technology innovations like "hiding treasures in a mountain cave" is in essence undercutting the US' own interests, while incurring ridicule from other members of the global community. 

In the upcoming days, if the US refuses to restrain the tariffs war or even tries to inhibit China's economic growth by instigating and fomenting more political troubles at China's geographical peripheries such as Hong Kong, Taiwan or Xinjiang, it will certainly lead to a rising adversary between the two countries and a wider psychological divide across the Pacific Ocean, which will do permanent damage to bilateral economic relations and personnel exchanges, analysts say.

As free trade and supply lines have been seriously battered by Washington's punitive tariff levies and wanton economic sanctions, a new equilibrium of supply chains is likely to emerge, which will reshuffle the world's supply system, edge out protectionist trade, and eat into American business interests. 

Statistics have proved that bilateral trade between China and the US is diminishing now, and at a quickened pace by double digits. China's imports of US products have continued waning for the past 16 months, according to official data.

While strolling through the supermarkets in Chinese first-tier cities, beef, milk and ice cream from South America, Europe and Oceania have edged out American-originated products, and lobsters from the US' state of Maine are gone, replaced by lobsters from Australia and New Zealand. Imports of US-produced agricultural staples including soybeans, fruits and nuts could permanently lose ground to a rising influx from countries like Brazil, Argentina and Russia. 

And, the US government's economic sanctioning regime is assaulting American industries particularly hard. 

By all metrics, Washington's chaotic trade policy is not only leading to the destruction of previous normal supply lines on a global scale, but also causing grave business discrimination among the US' own companies. 

Washington has approved some companies such as Microsoft Corporation to resume technology sales to Huawei, and President Trump said he is considering exempting Apple's electronic products from his punitive tariffs. Then, what about other American industrial firms which cannot get a relief? If some of the US semiconductor chipmakers - say Micron Technology - report sharply lower earnings at the year's end, will the White House rush to their rescue?

All the more, the Trump government's tariffs war and overall policy uncertainty have rammed up the pressure on its businesses to consider how they will handle business operations, including whether to increase investment or cut payroll. 

The author is an editor with the Global Times.


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