Source: China Daily Published: 2019-6-20
A lose-lose strategy by which the United States thinks it can inflict more economic damage on China than on itself is a very "big miscalculation" and will ultimately increase the "pain" on the people in the United States, according to John Ross, a British academic and senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China.
"It is estimated by the Oxford Economics that it will cost the average US household at least $850 a year if the US is going to impose tariffs on all Chinese products," Ross said.
Oxford Economics, a leading consultancy in global forecasting and quantitative analysis, said in a report focusing on the US-China trade relationship that trade with China not only saved a typical US household $850 in 2015, but also has created 2.6 million jobs in the US, which could be put at risk due to retaliatory tariffs.
US strategy to 'increase pain' on its people
"Therefore, what the US is doing now is not a policy which will aid the US. It is a big miscalculation that the US think they can impose more pain on China than on the US population," he said.
Having worked in China for more than 10 years, Ross said China's performance on the global stage is very "skillful" and highly praised the foreign policy basis of China.
"The idea of the common destiny of humanity is absolutely brilliant. And the growth potential of the Best and Road Initiative is the most important growth development in the whole world," he said.
"China is a very strong economy. It is certainly not going to be put off by a few tariffs by the US," he added.
Ross said China's stance on the trade tensions is "absolutely correct", with the white paper recently released giving a "very reasonable statement of China's position".
"It shows China doesn't want this fight because China will lose from this trade war as well as the US. Therefore, it would prefer not to have it." he said. "But, on the other hand, if the US adopts the lose-lose strategy, then the only way of China can deal with this situation is to ensure that the US also suffers."
"The white paper said very briefly about China's bottom line. The problem is the US that had a very bad method of negotiation," he said.
Ross noted that with the US abandoning or weakening globalization, the whole global economy has been negatively affected. As a consequence, more and more countries and territories won't follow the steps of the US including the European Union.
"The EU is not committing itself to support the US at all. Although it will keep a low profile because it depends on the US for military defense, it actually won't go along with what the US do to the economic front," he said.
Ross mentioned the example of Huawei, and said it's not easy for the EU to keep quiet and calm but won't go along with the US policy while facing the pressure placed by the US on cutting Huawei out of the launch of 5G.
"Huawei is about nine months to a year ahead in the development of 5G and it's cheaper, which means if you don't use Huawei equipment, it will be more expensive 5G and it's going to be later," he said, adding that those governments couldn't risk the development of 5G, which is "the key for the whole economy" in the coming future.
John Ross is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.