On March 23, when U.S. President Donald Trump signed a memorandum that could impose tariffs on up to 60 billion U.S. dollars of imports from China, Sino-US trade relations have triggered widespread concern in the world. Whether the Sino-U.S. trade war will break out and whether it will evolve into a global trade war? Responding to these questions, Pascal Lamy, the former Director-General of the World Trade Organization (WTO), gave his opinions when he was invited to lecture at the forum of Chongyang Institute for Financial Studies at Renmin University of China (RDCY).
“Mr. Lamy, as a world-renowned politician, promoted the improvement of the international trading system during the eight years (2005-2013) when he served as Director-General of the WTO.” Wang Wen, Executive Dean of the RDCY said in his opening remarks. He also express sincere gratitude to the other attendees including Danilo Türk, Former President of Slovenia, Non-Resident Senior Fellow of RDCY, Zhang Yanling, Former Executive Vice President of Bank of China, Executive Director of ICC, Senior Fellow of RDCY, Hisham EL-ZIMAITY, Former Assistant Foreign Minister for International Organizations and Multilateral Diplomacy of Egypt and also the Non-Resident Senior Fellow of RDCY, Zhang Shaohua, Deputy Inspector of the Office of Senior Advisors at The People’s Bank of China, Bai Ming, deputy director of the Institute of International Markets of the Ministry of Commerce, and Zhou Xiaojing, senior fellow of the RDCY.
Mr. Lamy said in his lecture that the current escalation of Sino-US trade conflicts stems mainly from Trump`s three arguments: First, the U.S. trade deficit is not conducive to U.S. development; Second, the main factor triggering the U.S. trade deficit lies with China; Third, China does not strictly abide by international trading rules.
Mr. Lamy notes that the U.S. trade deficit problem is mainly due to the strong consumption ability of Americans and the low savings rate. He said, "Trump`s interpretation for the trade relations in the 21st century with a wrong concept is very dangerous, and the U.S. attempt to override the international rules is anti-historical."
As for whether the world will fight a trade war, Lamy believes that the key factor depends on whether the United States is willing to negotiate. He still hopes that all countries in the world will continue to comply with the existing rules of the international trading system and will continue to push forward the reform and improve the framework.
Some guests put forward their views after Lamy`s speech.
Mr Türk pointed out that the punitive tariffs on Chinese exports appears to be very large, but only accounts for 2.6% of China’s global exports. Therefore, the overall impact on Chinese exports and the Chinese economy is not as large as that rendered by some experts and the media.
Zhang Yanling believes that there will be no winners if the trade war breaks out. Opening the market is currently a key driver for economic growth and job creation. Meanwhile, she cited her own experience working in the bank to emphasize that the United States loss will outweigh the gain when it comes to attacking China with 301 investigation.
Hisham EL-ZIMAITY said that the attitude of United States toward China and other countries is consistent, that is, constantly exerting pressure to secure benefits for itself.
In face of the current Sino-U.S. trade situation, Zhang Shaohua proposed two suggestions: to further improve China`s trade environment and consider establishing closer trade relationship with the EU.
“I personally believe that the United States` withdrawal from the existing international trading system is not conducive to its own interests.”Lamy reiterated in response to the audience questions. He said that what we need to do in the future is to find new rules and minimize the uncertainties in the negotiations. And China could put forward more international rules on investment in order to create a better investment environment during the implementation of the “Belt and Road”.