Source: Xinhua Published: 2018-8-2
In stark contrast to China’s win-win proposal, the U.S. irrational decision to impose tariffs on Chinese imports would lead to a “lose-lose situation”, a British expert has said.
The relationship between the United States and China could be win-win, since they are very “complementary economies”, John Ross, Senior Fellow at the Chongyang Institute for Financial Studies, Renmin University of China, told Xinhuanet in a recent interview.
An average American family could gain 850 U.S. dollars a year as Chinese imports are lower-priced than they could get from anywhere else, he said, quoting a study by the Oxford Economics.
Therefore, good relationship between countries is explicitly based upon mutually beneficial cooperation, Ross noted.
However, the Trump administration first imposed a 25-percent tariff on 34 billion U.S. dollars' worth of imports from China, igniting the largest trade war in world economic history.
Then it went further to create a list of tariffs on another 200 U.S. billion dollars of Chinese goods.
“It is the American people who are going to pay a big price,” Ross stressed.
As it stands, the U.S. tariff measures will hurt U.S. business groups and consumers, ordinary workers and farmers, he continued.
This has been borne out by the fact that U.S. previous tariffs against washing machines and steel had made the price of these products go up by a very large amount, which not only affected its consumers, but also greatly affected South Korea and the EU, Ross said.
According to him, an overwhelming majority of American economists and business groups are against these tariffs.
But for those who support the tariffs, Ross believed their choice reflects that they lack confidence in the U.S. economy.
In light of the 2.2 percent average growth rate of the U.S. economy for the last twenty years, and record high trade deficit in nice years, Ross thought these are reasons the U.S. resorts to such wanton trade protectionism.
But what is absolutely certain is that these tariffs will not reduce its trade deficit, wind down China’s economy, nor pick up its own, according to Ross.
“China’s economy, on its macroeconomic fundamentals at the present time, will continue to grow at about 6.5 percent,” Ross said.
As for the trade deficit, he said, it can only be reduced through the increase of production or the decrease of expenditure, for example, to spend less on its military and health care sector.
To block imports from China or from somewhere else is not a radical solution, Ross said.
John Ross is Senior Fellow at the Chongyang Institute for Financial Studies, Renmin University of China.