The state-owned Xinhua News Agency has called the Trump administration’s proposed 25% tariff on $50 billion in Chinese imports a form of “trade bullying,” and warned that it is likely to cause “ten types of harm” as a consequence.
An opinion piece published on 4 April entitled “US Trade Bullying Will Cause Ten Types of Harm” (美国贸易霸凌会造“十种伤”) says that the proposed tariffs affect approximately 1,300 imports from China, with a estimated value of around USD$50 billion.
“The US government is ignoring global opposition, undertaking unilateral trade coercion, and triggering concern amongst all parties.
“The public release of this [tariff] list by the US disregards the mutually beneficial, joint-win nature of Sino-US economic and trade cooperation over the past 40 years, and is contrary to the national interests of the US, contrary to the national interests of China, as well as contrary to global economic interests.”
The Xinhua article outlines a total of “ten types of harm” that will arise as a result of Sino-US trade disputes.
1.Harm to trade, difficulty reversing trade deficits
“Everyone knows that the US trade deficit is a structural dilemma, and the fundamental reason is that US investment rates are higher than savings rates, leading to capital account surpluses and current account deficits.
“For this reason, Trump’s proposal of multiple trade protection policies will be of no help to reverse trade deficits.”
2. Harm to consumers.
“The levying of a tax on imports is in actuality the levying of a tax on US consumers themselves…25 renowned US retailers have Walmart, Macy’s and Best Buy have sent a letter to Trump calling for the US government not to impose a levy on goods imported from China.”
3. Harm to employment.
“Trump’s earlier decision to levy a tariff on steel aluminium will protect jobs in the US steel and aluminium sectors, but will be a shock for employment in downstream sectors.”
4. Harm to finance, “a steep increase in risk.”
“Morgan Stanley and other investment banks expect that this year Chinese and US stocks could face significant re-adjustment pressure, yet Trump’s frequent trade policy interventions are undoubtedly exacerbating the mood of panic amongst investors.
“Once the New York Stock Exchange comes under repeated pressure to sell-off, we need to watch out that re-adjustments don’t become another global financial crisis.”
5. “Harm to growth.”
“The trade protectionist measure of imposing tariffs will not raise the welfare of the US people, but will be of greater detriment than benefit in terms of long-term impacts upon economic growth.”
6. Harm to partners, “unanimous criticism from all nations.”
“Trump’s steel and aluminium tariffs have already met widespread opposition from the international community, with expressions of concern and criticism from the EU, Germany, France, Japan and Turkey.”
7. Harm to reputations, “harm to the name of a great nation.”
“The 301 probe…is extremely unilateral in character, and is absolutely not the conduct of of a responsible, influential great nation.
“If Trump goes his own way, from a long-term perspective the US will inevitably “spite its own face,” and inflict harm on its own leadership ability.”
8. Harm to global trade, “a shock for multilateralism.”
“This type of unilateral action by the US not only breaches the rules and spirit of the WTO, it is also an open provocation to the current, multilateral trading system.”
9. “Harm to the world, recovery or setback”
“The global economy has already undergone 9 years of recovery since the Great Financial Crisis…if a trade war explodes, the sound recovery momentum of the global economy will undoubtedly meet with severe setback.”
10. “Harm to the broader environment, loss of order causes concern.”
“Once a trade war kicks off, the broader environment of global economic cooperation will inevitably be disrupted.”