Source: Xinhua Published: 2019-6-24
John Ross, former director of economic and business policy of London, receives an interview with Xinhua in Potters Bar, Britain, June 18, 2019. Prolonged trade tension takes its toll on the United States and will hurt more severely in the future, said Ross. (Xinhua/Ray Tang)
Prolonged trade tension takes its toll on the United States and will hurt more severely in the future, said John Ross, former director of economic and business policy of London.
"The US economy is starting to slow down this year and even more in 2020 just for the business cycle, under those circumstances, the trade war has more negative effects because the US population feel it more," Ross told Xinhua in a recent interview.
"The tariffs are simply a tax which is paid by US consumers and US companies," he said. "There are some differences in the calculation on how big that cost will be, but no economist believes the tariffs are paid by China."
"China has published the white paper which set out the bottom line. It is exactly the right way to negotiate -- it doesn't make exaggerated claims like what the US has claimed, it doesn't say this is beneficial to China's economy," he said.
"According to Oxford Economics, if the tariffs were extended to all Chinese exports into the United States, (it) would cost the average American family about 850 (US) dollars a year. In a letter signed by more than 600 leading American companies, the figure up to more than 2,000 dollars," said the economist.
Besides the US consumers, Ross noted that the US capital market also suffered a lot.
"The American market becomes more hugely sensitive, you can lose gigantic sums of money by these events," he said.
"It's also having a huge effect on US farmers. They're the people who are getting worse," said Ross, adding that these are the reasons why the US government's opinion polling is "very bad at the moment."
The US government was under the impression that the trade tension would not last long and cause them pain, said Ross. "They thought if they made a big noise and threatened China with all sorts of things then China would give in and give them what they want."
As a senior fellow of the Chongyang Institute for financial studies, Ross has studied China's economy for many years. He believed even though the trade tension could also dent the economic growth of China, it is not going to cause "any uncontrollable problems."
According to the IMF's economic prospects, he said, "under the worst scenario, China's economy is growing more than twice as fast as the US in this year, and even could reach three times in 2020."
Ross also warned that the US trade protectionism is "a danger to everybody." "There is no country which has followed the same path as the United States to initiate in tariffs," he said.
"Furthermore, countries which delayed for various tactical reasons have already responded to US tariffs. For example, the latest one is India imposed retaliatory tariffs against the US," said the economist.
"Even in the US, although there is a great deal about tariffs, the trend of exports and imports as a percentage of the US economy is still fundamentally upwards," he said, noting that imposing tariffs cannot be a long strategy for the United States itself.
John Ross is a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China.