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US unilateralism, protectionism `a dead end’

2018-04-09

Source: Global Times    Published: 2018-4-8


The US` proposed tariffs on Chinese goods, a typical unilateralist and protectionist move, will cause serious damage to businesses in both countries and will not work out, Chinese and US business executives told the Global Times.


The ongoing China-US trade dispute has already posed serious risks to businesses in both countries, and some company representatives have called for constructive talks to address the issue.


US multinational beverage company the Coca-Cola Co hopes China and the US will be able to work out creative solutions to effectively address the trade dispute, Zhang Jiantao, vice president of Coca-Cola Greater China, told the Global Times on the sidelines of the 2018 Boao Forum for Asia, which runs from Sunday to Wednesday in Boao, South China`s Hainan Province.


"At a time of disputes, businesses can serve as anchors and stabilizers. We would like to call on both sides to work out solutions via constructive dialogue," Zhang said.


The US Trade Representative (USTR) on Tuesday published a proposed list of Chinese goods subject to 25 percent tariffs, which was followed by countermeasures launched by China on Wednesday to impose tariffs of up to 25 percent on 106 types of US-made goods.


On Thursday, US President Donald Trump instructed the USTR to impose tariffs on an additional $100 billion worth of Chinese products under Section 301 of the US Trade Act of 1974, which led to the escalation of the China-US trade brawl.


For some Chinese companies operating in the US market, the pain of the dispute has already been felt.


The China Chamber of International Commerce (CCOIC) said that since the US released its proposed tariff list, companies in both countries have been facing growing difficulties in reaching business deals, read a statement the chamber sent to the Global Times on Friday.


"Protectionism has brought disaster to the world in the past, and all WTO members should cherish the current multilateral trade system," the CCOIC said, noting that it is normal for China and the US to have certain requests under the system, but that unilateralism and protectionism never work out.


Chinese construction machinery company SANY has seen its cumulative investment in the US market surpass $100 million, and its plant in the state of Georgia has been operating since 2012, Li Liangjian, a manager of SANY America Inc, told the Global Times.


However, "based on the proposed tariff lists by the Trump administration, some of our machinery equipment sold in the US market may be affected once the list takes effect," Li said, noting that some sales agents for the company have already shown concerns over the sustainability of Chinese products in the market.


SANY mainly sells excavators in the US, with a current annual sales volume of about $100 million, accounting for 1 percent of the total market share, Li noted.


US aircraft giant Boeing Co said Wednesday that it would engage in talks with the US and China in an effort to prevent the trade spat from harming the global aerospace sector, the Wall Street Journal said.


The proposed list of 106 types of US products subject to tariffs of up to 25 percent released by the Ministry of Commerce on Wednesday includes soybeans, automobiles, chemical products and airplanes.


The US` protectionist actions will eventually hurt its own economy, as American consumers will pay much higher prices for Made-in-China products if the US government goes with the proposed tariffs, said Jia Jinjing, an expert from the Chongyang Institute for Financial Studies at the Renmin University of China.


"Most Chinese products exported to the US market could not easily be replaced by [items from] other countries in terms of price and quantity. As result, the US has to import from China or Chinese products from a third-party country," he told the Global Times.


The US National Retail Federation has also expressed concerns over what the new set of tariffs might entail, Reuters reported on Saturday. The impact may hit more consumer products and basic retail goods coming from China, Jonathan Gold, vice president of the federation, was quoted as saying in the report.


"What the US has done has jeopardized the orders and rules of international trade, which will hurt the global economy. More importantly, it will hurt the US itself," Jia said.


Jia Jinjing is the Director of the Macro Research Department at Chongyang Institute for Financial Studies, Renmin University of China.


Key Words: US   China   Trade dispute   Jia Jinjing  

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