Source: CGTN Published: 2018-7-2
The escalation of Donald Trump`s trade war with China has swiftly spilled over to other continents, including Europe and even Africa. Despite the economic ripples, a backlash from the rest of the world, and risks of isolating America, the very architect of the multilateral trading system, the economic arsonists in Trump`s White House are setting small fires around the world`s major financial epicenters.
With the approach of July 6, when the first batch of Trump`s tariffs on Chinese imports is set to take effect, the world is watching how the looming trade war will unfold. Will the Trump administration simply bring an end to the months-long brawl now that the flattening US Treasury yield curve suggests that there may be another recession in the near future and could well imperil the president`s "America First" strategy? Facing an obstinate Trump, what can Beijing do to prevent the situation from deteriorating? CGTN Opinion interviewed four China-US watchers to weigh in on the topic.
Liu Zhiqin, senior fellow at the Chongyang Institute for Financial Studies at Renmin University of China
So far, the trade war between the world`s two largest economies has yet to break out. But if both sides fail to find a good solution, it will erupt sooner or later.
Donald Trump is very intelligent. He used to be a clever merchandiser who tried his best to get what he needed. This is his philosophy. But now it`s a good time for him to understand the Chinese philosophy, to know the Chinese wisdom of how to negotiate and help him get his goal by negotiating.
In Chinese philosophy, friendly talking, mutual benefits and mutual respect are more important than anything else. One cannot force the other to talk with you by threatening. You should pay enough respect, time, and patience to bridge all the gaps and distances with the other side.
Trump is the kind of person eager to learn new things, new knowledge, new philosophy, so he could overcome the shortcomings that he has shown to the world. He will become cleverer. Once he has learned the Chinese philosophy of negotiating, the trade tensions will probably get mollified.
In addition, the brewing contention will unlikely last several years because both sides cannot afford such a cost for taking such a war.
Rick Dunham, veteran political journalist, former president of US National Press Club
There are three possibilities. None of them are good. The first one is that the US loses the trade war and this hurts consumers in the US because of higher prices for imported Chinese goods. It hurts the exporters in the US because of the increased cost of production and limits on their markets.
The second is that it`s bad for both the US and China. The retaliatory tariffs going back and forth hurt both economies, slow the growth and in the worst scenario, cause recession in one or both countries.
The third situation, which is the worst for the world, is that the war triggers a global recession. Other countries in the world whose economies are not as strong as the world`s two largest economies drift into recession and then have cascading effects that hurt the global financial system and consumers around the world.
Who knows where it will end. Today, the trade hawks are winning the battle. But in Trump`s White House, things can change very quickly.
One way is that China can figure out a way for Trump to retreat from a tariff war by giving him what looks like a victory, as the president does not want to lose face.
Wang Dan, China analyst at Economist Intelligence Unit
For this trade war, it`s not just between the US and China. It`s the US against the whole world. It`s not just China and Europe, it`s most Asian countries and even some African countries involved as well.
For China, there will always be alternatives, one of which is to diversify its import sources. But in terms of its geopolitical impact, it will be a lot more significant because this trade war is not about trade: It`s about a shift in power, which has started since 2008 and speeded up with the inauguration of Donald Trump as US president.
Trump has a zero-sum world view. If a country wins, other countries must lose.
Talks will not change the result also because the tariff war began with the fact that Trump thinks China is forcing foreign companies to transfer technology, and the US business community loves to see his investigation into intellectual property, which they have been advocating for.
James Rae, Fulbright visiting scholar at Beijing Foreign Studies University, professor of politics at California State University
The trade row will continue for some time because Trump`s advisers are very supportive of trade protectionism. They are very nervous and skeptical of China`s economic system and China`s economic rise. As long as they are Trump`s chief advisers, it will continue.
The stock market in both America and China is shaking, which will put some pressure on the Trump administration. And in addition to that, the tariffs that China will reciprocate on the US will hurt American industries. For example, motorbike producer Harley Davidson announced they`re going to move to Europe. Hence there`s a chance that he will lift it, but I don`t think China will make immediate concessions. So I`m not so confident in the short run about any resolution.
However, I think Republicans will lose control this fall. Once that happens, the Democrats will launch impeachment hearings on whether Trump has the qualification to be president given the Russian investigation or other scandals. And there will be a chance Republicans may join in that process.
If that happens, the US-China trade ties will be brought back to normalcy.