Latest News
Commentary: Three major misconceptions behind Washington's tariff tantrums
Last Updated: 2018-04-12 00:12 | Xinhua
 Save  Print   E-mail

In total disregard of global opposition, the United States is unilaterally wielding the stick of trade-protectionism, trampling on the rules-based multilateral trading system.

Ironically, the United States was the one who imposed the rules when the global trading system was conceived decades ago and has since enjoyed the lion's share of benefits.

Now, the U.S. government under President Donald Trump wants to shake off the "shackles" of the trade system, ripping up international agreements and getting tough on trade partners, while seeking the benefits provided by the framework. This is not only a unilateral approach, but a two-faced one.

After proposing steep tariffs on Chinese imports worth 50 billion U.S. dollars, the Trump administration has threatened to slap additional duties on Chinese goods worth 100 billion dollars.

Judging from U.S. official statements, Washington's headlong rush to provoke trade frictions and play a game of chicken is largely based on three primary perceptions. However, all of them are untenable.

First, the Trump administration sees trade as a zero-sum game, loathes trade deficits, and blames them for domestic job losses.

In fact, as numerous economists have pointed out, trade is a positive-sum game, in which both sides of the transaction gain. The United States' trade imbalance is just a natural outcome of its economic habit, which leans towards low savings and high consumption. That explains why it has trade deficits with more than 100 countries.

Meanwhile, although foreign competition contributes to some job losses, the main culprits are automation, digitization and industrial restructuring. Trade is not the enemy here.

Second, the U.S. government accuses China of engaging in unfair trade practices in carrying out its "Made in China 2025" strategy.

As a matter of fact, China's strategy is in essence no different from the United States' "National Network for Manufacturing Innovation" scheme, which is launched to encourage innovation and strengthen the manufacturing sector. Being the global leader in science and technology, the United States should have the confidence to compete with other countries in an honest manner.

Moreover, "Made in China 2025" is market-oriented, which helps Chinese companies to better cooperate with foreign partners and engage in the global market of free trade.

Compare and contrast "Made in China 2025" with the "Buy American Campaign" lambasted on American television, coupled with the huge banners, and posters in practically every shopping avenue screaming "Proudly made in America," and you will clearly note the stark difference.

Third, U.S. policymakers are betting that browbeating might intimidate China and extract concessions beyond what is reasonable.

It might have worked in the past with other countries, but today, playing hardball will by no means cow China into submission. By defending free trade and multilateral trade rules, China holds the moral high ground. On top of that, China has the will and resources to strike back.

History has repeatedly proved that no country can emerge from a trade war unscathed. U.S. stocks fell sharply as fears for a trade war rattled Wall Street. Furthermore, it will cause spillover-effects on other countries.

As trade serves as a significant driver for economic growth and sustainable development, protectionist policies based on "whims and fancies" of an individual also risk hindering the hard-won global growth a decade after the most recent international financial crisis.

With great power comes great responsibility. As the world's second largest economy, China has always been a firm proponent of economic globalization and performs her duty as a guardian of the multilateral trading system.

Addressing Asia's top economic forum on Tuesday, Chinese President Xi Jinping declared that "We will continue to safeguard the international order and rules, and support free trade and the liberalization and facilitation of trade and investment."

As for the United States, the world's top economy, now it is high time that it abandoned its distorted perceptions, laid down its protectionist stick, and joined the broader international community in pursuing win-win results within the open, rules-based multilateral trading system.

Share to 
Related Articles:
Most Popular
Chinese | BIG5 | Deutsch
Xinhuanet | | People's Daily Online | | CNTV | | Global Times | | China Youth International | Visit Beijing |
About | About the Economic Daily | Contact us
Copyright 2003-2015 China Economic Net. All right reserved