Dragging China-US ties into “new cold war” to be biggest-ever crime in 21st century

A senior official with the US’ Central Intelligence Agency (CIA) claimed recently that China is waging a “quiet kind of cold war” against the United States, using all its resources to try to replace America as the leading power in the world.

“Though it is different from the Cold War conflicts between the then Soviet Union and the US, it’s still a ‘cold war’ by definition.” added Michael Collins, deputy assistant director of the CIA’s East Asia mission center at a forum on July 20.

The remarks were widely quoted by western media, making Collins one of the first American officials to clearly accuse China of invoking a “new cold war” against the US.

“China, from a counter-intelligence perspective, in many ways represents the broadest, most challenging, most significant threat we face as a country,” FBI Director Christopher Wray said at the same forum.

More extreme and even hysterical words are now used in the US to label China, as Washington has gone far describing China as an “enemy” and has somehow made such ravings politically correct.

In addition, Washington has made criticizing China a justifiable behavior, which means one can talk nonsense without thinking and will likely get some benefits by doing so.

An evidence should be provided if Mr. Collins made such a serious judgement like “China is starting a quiet kind of cold war”. However, he gave no reasons but his impression.

The accusation that China is damaging the US’ position and then replaces it is baseless. What does the “China” refer to? Does it refer to the Chinese government or civil society? China’s official documents have never indicated such a message, and the Communist Party of China has never set such a goal.

In addition, it has never been a public opinion in China to take the US as an enemy. Even when some people boast that China has caught up with the US in certain fields, such words will immediately be mocked and denied by the public.

It’s a widespread willingness and a consistent diplomatic policy of China to maintain cooperation with the US. Even when the US has initiated the trade war, China still insists on taking countermeasures according to the international practice, treats the trade war objectively and never takes the first step to extend trade conflicts to other fields.

China is clearly aware of the problems in the bilateral relations, but is willing to handle these challenges properly in the long term.

All of the conflicts and disputes between China and the US in recent years were stirred up by the US, and China was always the one to make passive responses.

China adopts a positive attitude toward joining the current international order, and has no intention on establishing a new set of rules. This point can be proved by the ongoing trade conflict between China and the US which doesn’t go beyond the range of the US-led rules.

China’s development is considered as a “fault” and regarded as a threat by the White House. It is even described as a “cold war against the US” by some American officials like Collins.

These narrow-minded politicians, lack of imagination and judgment, cannot find other words but the “cold war” cliche to describe such an unprecedented major country relationship between China and the US.

Some American elites attributed the failure of China-US ties to China’s adherence to the path of socialism with Chinese characteristics. However, is there a necessity for countries with different social systems to confront with each other? This is the last thing that China wants, but some US officials are just fanning up this theory and expecting such confrontation.

The China-US relationship is facing unprecedented complexity and challenges. However, in the 21st century, the trade war cannot cloud the interwoven interests between the two countries, and to cut off the China-US ties is nothing but a pipe dream to turn back the hands of time.

China-US relationship is the toughest agenda in the history of international relationship. Facing it and managing it will be an act responsible for not only the people from both countries, but also the world and the human civilization at large.

Forcing a “comprehensive cold war” between China and the US will be the biggest crime in the 21st century, and some American elites are just going toward this shameful direction. It’s hoped that both countries and the international community can curb the crime and protect the future of human.

Trade war causing a real impact on US economy

US President Donald Trump announced Tuesday that the US Department of Agriculture will adopt a $12 billion emergency plan to aid farmers hurt by the trade war. It is considered a clear signal that the trade war is causing a real impact on the US economy as well as an avowal by Trump to deploy tariffs as a weapon of trade war.

This is a funny scene. The US is not suffering natural disasters. American farmers should have made money expanding their markets. But they are now being aided. No one knows how long this peculiar “disaster” will last. Many US famers must be at a loss over their future livelihoods.

With the escalation of the trade war, more industries will be affected. It will be difficult to decide who will receive subsidies and who will not. Trump’s administration is disrupting the basic logic of economic life. By causing trouble for China, the EU, Mexico and Canada, it is plunging the US domestic economy in chaos.

Other countries including China will of course be forced to face the impact of the trade war. They will also carry out assistance activities to affected industries and companies. The White House is hoping that Beijing will make a major concession to Washington when it can no longer stand the escalating damages.

Such wishful thinking is too naïve. Trump believes that US society can endure the agony of a temporary trade war for long-term interests. Then why would he be certain that China cannot bear the same pain?

The vast majority of Chinese people are well aware that China has been confronted by the US with a trade war. No matter how reluctant the nation is to fight, it has no alternative. But US society knows that the trade war was launched by the White House and the ball is in the US court to stop it or find a wiser option. The Trump administration needs to prove that it is correct to bring its people anguish through the trade war, while other nations do not need to do anything more than retaliate.

China has experienced numerous difficulties and challenges. Its development in the past 20 years has been relatively smooth, but its mechanism remains to deal with major obstacles. The nation once faced massive layoffs among its State-owned enterprises and collective economic sanctions from the West. How could the difficulties of a trade war be insurmountable?

Washington has always accused Europe and China of agriculture subsidies. As a matter of fact, the US itself has long offered subsidies to its farmers, and now it has announced increased subsidies. It seems that the international discourse around the rules will be changed.

Some believe that Trump will hold onto his mistakes before the mid-term election in November, so as to maintain support.

But the Chinese people are looking beyond November. They are preparing to fight in the long run. Perhaps only with such a massive trade war can Washington rethink the value of Sino-US cooperation.

US’ trade policies will damage its own companies

People may wonder why the US government started the product exclusion process for Chinese products subject to Section 301 tariffs through the office of the US Trade Representative (USTR) only a few hours after announcing tariffs on $34 billion worth of Chinese products. The public can file exclusion requests until October 9 this year. Any exclusions granted have to meet three requirements and will be effective for one year.

The intention of the US can easily be seen. The US is desperate to rescue its domestic companies while trying to hurt China. In the $34 billion list, roughly 59 percent of the goods are made in China by multinational companies, 70 percent of which are US firms. And the products manufactured by China are irreplaceable in the global production chain. So the US has to come up with a way to avoid damage to its companies.

Can product exclusions save US companies? On the long list of items subject to the US tariffs, a large portion is travel products including luggage, wallets and backpacks. The market for travel products is worth $31 billion, and 87 percent of the products are made in China. Matthew Shay, CEO of the National Retail Federation (NRF), recently said the tariffs are hurting American consumers instead of resolving trade issues with China.

“Retailers cannot easily or quickly change their global supply chains,” said Jonathan Gold, NRF vice president for supply chain and customs policy. Nearly 70 percent of US firms in China oppose the use by the US of tariffs as bargaining chips, according to a report by the American Chamber of Commerce in Shanghai. They probably do not want to join the line of those applying for exclusions.

Many US high-tech companies have high expectations for China’s manufacturing potential and are hoping for long-term cooperation. Even if they get product exclusions, they will only be valid for one year. The US government has pushed its elite companies into a hard position, and many may eventually move their production facilities to China or even build their headquarters here, like Tesla.

If US President Donald Trump escalates the trade friction by extending the tariffs to $200 billion worth of Chinese products, the damage to US firms will increase. And the opposition to his policies will also become stronger. The companies do not want to lose the Chinese market, which has enormous consumption potential. And despite some ups and down, US firms in China have mostly had a smooth path. But they could not withstand the collapse of Sino-US trade relations.

It is worth noting that US firms have seen relatively low investment return rates in China, and this has been distorted into an example of unfair treatment by China. But this situation is common and has been seen by foreign firms operating in many markets, including Japan, Australia and European countries. Most US firms in China are optimistic about China’s stability and the sustainability of its market. They hope China can keep up the pace of its opening-up, better protect intellectual property rights, and lower the bar for entering the market. Therefore, few US companies have left China. Data released by China’s Ministry of Commerce shows that in the first half of this year, there was an increase of 96.6 percent year-on-year in the new companies registered by foreign investors in China.

And the number of foreign investors is expected to keep growing in the next five years. China aims to create the best environment for businesses around the world. The product exclusion process announced by the US shows that the Trump administration needs to clean up its own mess as the tariffs have so many drawbacks and are only drawing opposition. China will keep to its opening-up promises and will be a firm defender of free trade and multilateralism.

The author is executive deputy director of the China Center for International Economic Exchanges.

Commentary: Develop core technology to break US high-tech monopoly

High-tech sectors have been put on a main battlefield of the trade war unilaterally provoked by the US, which has already angered the whole world.

From the fine on Chinese tech firm ZTE, to the high tariffs levied on Chinese high-tech products, the US administration is aiming at nothing but containing the development of China’s high-tech industry.

How can China’s high-tech enterprises, especially those in the internet information sector gain a foothold when facing the overwhelming technological monopoly of the US?

The answer, I believe, is to step up efforts on research and development of the country’s own technologies, and build a safe and controllable system of information technology.

Some believe that Chinese high-tech industry should establish its own advantages, but the fact is that China has always been in a passive and defensive position in this monopolized market. Though the country has made tremendous achievements in internet information technologies, it still sees a large gap between itself and the US.

China is still dependent on other countries in many core technologies, and many foreign products and services still monopolize its market. A risk control is more important against such background.

It is almost impossible to break monopoly in the information technology industry, which is different with some traditional industries like auto sector.

The automobile market is also dominated by some big names, but the emerging manufacturers still have space to expand ground through differentiation and co-exist with the former comers. The competition is fierce, but the market is far from being monopolized.

However, that is not the case in the information technology sector. Only a few brands can exist under each sub-sector, and even excellent new technology probably cannot survive the competition. For instance, the Windows operating system of the Microsoft has monopolized users’ desktops, but it still tumbled in the mobile operating system competition.

The failure of Microsoft in this area is not because of technologies, but the lack of ecology. Similarly, Intel has control over both desktop and server markets with its advanced CPU technologies, but its performance in the mobile sector is far from passable.

Both examples indicate that the existing monopoly in information technology industry may kill new techniques, even the great ones.

In other words, the information technology industry is challenged more by monopoly. As a result, apart from making breakthroughs in research, China also has to find a way to break the monopolies of transnational corporations in order to gain a foothold on the market.

Absolute fairness doesn’t exist in internet information industry, not to mention orders and rationality. We therefore cannot count on reasoning with the US in hope of ending its monopoly.

It’s not easy for new technologies to coexist with monopolists in the internet information industry. In light of such backdrop, China would take considerable time developing its own controllable alternative solutions in the future. The process might have two finishes: failure or success. As long as the alternative solutions work out as planned, they will finally gain a foothold.

In general, whether new technologies can replace old ones depends on both their own competitiveness and ecology, and the latter is sometimes more decisive. It can be well explained by the above two examples of Microsoft and Intel.

As a matter of fact, the number of users and number of technologies are in a proportional relation. Such virtuous circle calls for enough support from the market, otherwise the technology won’t survive a chance.

Given such background, research and market should be given equal weight when developing internet information technology, as Chinese President Xi Jinping has also stressed the importance of intensified research on core technology under the guidance of market.

Currently, a majority of the internet information markets have been monopolized by foreign enterprises, so the exploitation of government procurement market is of vital importance for China.

China has not yet joined the WTO’s Agreement on Government Procurement (GPA), so its government procurement market remains closed. This sector, as a result, enjoys a great chance in developing China’s own core technologies.

Though it only accounts for a very small percentage of the country’s general market, it still has a size equivalent to that of a major European country thanks to China’s huge economic aggregate.

China started to develop controllable alternative solutions on electronic official documents in 2014 under the instructions made by Xi in December 20, 2013. The fruits scored in this field have encouraged the development of other sectors.

For instance, the secure intranet project built by China Aerospace Science and Industry Corporation Limited (CASIC) has become the country’s largest controllable production system with the best performance. The system, which now serves 100,000 users, is a result of 4 years’ research and development and an investment of 300 million yuan.

The domestically-developed controllable alternative solutions are expected to be extended in the information technology sector, and the core technology will break the monopoly of foreign brands and gain a foothold in the market.

It will also ensure the Internet security of government and other important sectors, replenish the short boards of China’s internet information technologies and ultimately help the country get rid of its dependence on others.

(Ni Guangnan is a researcher at Institute of Computing Technology of Chinese Academy of Sciences and an academician at Chinese Academy of Engineering.)

Countries around the world don’t want to see a China-US trade war

Foreign citizens of Chinese origin and overseas Chinese are closely following the trade war that the US waged against China, saying that countries around the world do not want to see a trade war between the two countries.

In the US city of San Francisco, Cai Wenyao, an adviser for the US Chinese Chamber of Commerce, found that buying corn is cheaper than before. “The price of one corn has dropped from $0.5 to $0.25. This price fluctuation may be related to the limited exports of US corn and to the dumping of corn in the domestic market,” Cai said.

“The counter-measures adopted by China greatly impact the middle and lower classes of the US. On one hand, manufacturers pass on increased costs caused by higher tariffs to consumers, indirectly increasing the living cost for ordinary people. On the other hand, the counter-measures for agricultural products directly affect the sales and these products have seen a sharp drop in prices, which decreases farmers’ income,” Cai noted.

China-US trade friction not only directly affects the interests of related industries in the US, but also exerts great psychological pressure on employees in other related industries, American scholar Zhang Jun said.

The economic complementarity between China and the US has weakened to some degree, and competition has intensified with the rapid growth of China’s economy in recent years. One of the reasons for the trade friction is that the US regards China as a potential opponent in terms of economic and trade relations, according to Zhang.

China-US relations will become more and more unstable as the friction heats up, which will have a negative impact on the global economy and international community, said Nan Gengxu, chairman of Global Max Media Group.

At present, China-US trade friction has reached an impasse. China is ready for the long-term trade friction, and is also actively seeking a way out by turning to global markets.

China-US trade friction has objectively encouraged a closer economic relationship between China and Europe, according to Shi Zhongsheng, President of the Fujian Federation of Industry and Commerce in France. Shi believes that the European economy has also been severely affected by US trade protectionism. Therefore, European companies can make up for some of the gap in China’s demand for imported US goods, providing new opportunities for China and Europe to expand cooperation.

On July 9, China and Germany signed more than 20 agreements totaling $30 billion in Berlin, covering a wide range of fields, including vocational education, climate research, autonomous driving, and health care.

For developing countries, China-US trade friction has not affected the trend to build closer trade relations with each other. “China has a huge consumer market. Many companies in Thailand and Southeast Asia have seen opportunities from China’s reduced imports from the US,” said Zhang Jie, a member of the Chinese Language and Cultural Education Foundation in the Philippines.

Zhang noted that the China-proposed Belt and Road Initiative, which features win-win cooperation, is gaining wide-ranging consensus among the international community. He also pointed out that economic globalization is an irreversible trend and said it is unwise for any country to impose trade barriers.

For mutual benefit, the two sides will need to work out their trade issues through negotiations on the basis of trade liberalization.

EU hits Qualcomm with fresh charges amid escalating trade tensions with US

The European Commission recently released a supplementary statement of objections on an in-depth investigation into alleged monopolistic practices of US chip supplier Qualcomm, after the commission fined Google high for breaching the antitrust rules of the European Union (EU).

The penalties, coming amid strained trade ties between the EU and the US, is regarded as a signal that good days of American technology giants in the EU will come to an end as Washington keeps increasing tariffs on EU products.

The statement is a procedural step of the investigation against Qualcomm based on the EU anti-monopoly rules, the commission said. The investigation against Qualcomm was initiated by the commission in December 2015 after the US chip maker was accused of monopoly practices by one of its major rivals.

The focus of the 2015 statement of objection was assessing whether or not Qualcomm had sold chipsets at prices below cost in order to edge out its competitors, while the supplementary statement issued this time will mainly conduct investigation on how much below cost the US company was selling its baseband chips.

The EU has already fined Qualcomm following the previous antitrust investigation. In January this year, the European Commission disclosed that between 2011 and 2016, Qualcomm had been making significant payments to Apple on condition it would not buy from rivals.

An agreement signed by the two made clear that Qualcomm would reduce the payments to Apple if the latter breached the rule.

The EU decided to fine Qualcomm $1.23 billion, which equaled 4.9 percent of the company’s turnover in 2017, as the agreement was found to have severely violated EU antitrust rules and adversely affected fair market competition.

This time, Qualcomm might face penalties of up to $2.3 billion if the latest EU accusation against it turns out to be true. The figure is 1/10 of the company’s global revenue – with the ratio being the upper limit of fines for monopoly practices under EU rules.

The EU judicial department disclosed recently that it had sent a new list of accusations to Qualcomm. Analysts pointed out that these papers usually reaffirm the preliminary conclusion drawn by the supervisory organization and explain the initial allegations to the company concerned.

The EU statement, though said to be just a routine procedure, is widely regarded as a counter measure against the high tariffs imposed on European products by the US amid the escalating trade disputes between the two parties.

It is noteworthy that just one day before announcing the additional investigation into Qualcomm, the EU fined Google a record-breaking 4.3 billion euros (around $5 billion) for monopoly.

The European Commission said it was fining the US tech giant for abusing the dominance of Android and pre-installing Google Search on Android devices to ensure that traffic on Android devices goes to the Google search engine and therefore cement its dominant position in general internet search and shut out its rivals from the market.

It was the second penalty Google had received from the EU this year, which was thought-provoking against the backdrop of the escalating trade tensions.

Commentary: US waging public opinion warfare

The trade friction between the US and many economies including China and the EU has not eased. In fact, it has worsened. Yet the US is using several tricks in public opinion warfare in an attempt to create the false impression that the US is the “victim” in the trade war.

First of all, the US knows “who is speaking” is more important than “what has been said.” Thus, following US President Donald Trump, US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer, and National Economic Council Director Larry Kudlow released statements respectively to justify US trade protectionism. They selectively chose “facts” and “data” to serve the purpose of depicting the US as the “victim” in trade.

The US, through various communication channels, created the illusion of “social consensus.” The Department of Treasury, Department of Commerce, Department of Justice, and the US Trade Representative all used so-called “facts” to justify US actions.

Moreover, many senior officials in the Trump administration are familiar with the characteristics and needs of various media, and know how to deal with the media to achieve a desirable communication effect. Therefore, sometimes US officials deliberately show toughness in front of the media.

Fourth, the US cites various reports and data to mislead the public into thinking that the US is justified in the trade war. But in fact, if one takes the time to delve into some of the reports’ details, one can find plenty of data flaws and logical loopholes.

The trade war with China is a systematic confrontation between the two countries in terms of strategy, coordination of various resources, and global mobilization capabilities. As an ancient Chinese saying goes, “The supreme art of war is to subdue the enemy without fighting.” This is true of public opinion warfare. Knowing better the tricks the US uses in the trade war will help China take more effective countermeasures.

US’ allying tactics on trade issue to meet with frustration

“The US is now the biggest wrecking ball to world stability and certainty,” China’s Foreign Ministry spokesperson warned against the US’ efforts to convince its allies to take on China more aggressively over trade issues on Friday, as experts also cautioned that the US’ plan will be met with frustration.

The US will seek to convince Japan and the EU to join it in a more aggressive stance against Chinese trade practices when financial leaders of the world’s 20 biggest economies meet in Buenos Aires this weekend in Buenos Aires, Reuters reported, but predicted that its hostile tariffs are set to leave US Secretary of the Treasury Steven Mnuchin in cold.

“As the No.1 power in today’s world, the US should at least think about its responsibility before making relevant policies or saying or doing anything, because it is the ‘order’ of the world that they are expected to promote, not ‘chaos’.” Foreign Ministry Spokesperson Hua Chunying told a regular press briefing.

“I said the other day that knowing someone is intelligence but knowing oneself is real wisdom. Today I want to add that nothing could be more disastrous than chaos,” she added.

The weekend event is also the first G20 financial meeting since China and the US exchanged tariffs on $34 billion of each other’s goods.

Mnuchin will hold separate bilateral meetings with officials from France, Canada, Germany and Mexico, among others, the South China Morning Post reported, adding that G7 officials on hand for the broader meeting would also hold an one-hour session during which they would again discuss “concrete action with regard to China and its economic aggression”.

The Reuters report is not optimistic about the US plan, holding that such efforts will be complicated by frustration over US steel and aluminum import tariffs on the EU and Canada who have responded with retaliatory tariffs.

The conclusion has been agreed by Eswar Prasad, former head of the International Monetary Fund’s China Division, who said that “(US) hostile actions against long-standing trading partners and allies has weakened its economic and geopolitical influence.”

“I have noted that many US citizens and its allies have spoken out unreservedly. The US is now the biggest wrecking ball to world stability and certainty. Its unilateralism and protectionism pose the greatest threat to the international rules and the world economic order,” Hua stressed at a briefing, responding to a ridiculous claim by a senior US official.

Peter Navarro, Director of the US National Trade Council, claimed previously that China is in a “zero-sum game” with the rest of the world when it comes to trade, and “what the US needs to do is to work with the rest of the world to deal with it.”

“The retail price for Apple’s iPhone 7 starts at $649, but manufacturers in China only get less than 1% of the value. When China exports a $450 worth of business suit to the US, China gets 5% of the profit while the US gets 84%,” Hua refuted his words with facts.

“I am curious how the US side would like to explain these figures. Do they also want to cite these figures to prove that the US is shortchanged in its trade deals with China and China is playing the zero-sum game here with the US?” she asked.

“Everyone is watching when the US side behaves like this in international relations, and everyone is hearing and seeing what the US officials are saying and doing. So, we all know what the whole world thinks of the US,” the spokesperson pointed out.

The EU is ready for retaliation if US President Donald Trump puts tariffs on imported automobiles and auto parts, its trade commissioner Cecilia Malmstrom warned on Thursday at a press conference, stressing that the EU has no other choices but to react though it does not want an escalation of the conflicts.

The EU is preparing a new list of American goods to hit with protective measures if a mission to Washington next week fails to persuade Trump not to raise levies on car imports, Bloomberg reported, citing two officials with knowledge of the issue.

A New York Times comment said that the EU is getting closer to China and Japan to buttress a global system as Europe and other parts of the world have accepted that Trump and his mission of disruption are not going away, after months of denial, anger, bargaining and depression.

Financial Times, in a commentary, called on the whole world to “join battle in Trump’s trade war Premium” as the best reaction against “America First” is to leave America behind.

Despite of the pouring blames, the Trump administration goes his own way under an “America First” policy.

The US Congress is mulling the first major change in a decade to the rules governing foreign investment reviews, a Wall Street Journal report disclosed on Friday.

“Negotiators from the Senate and the House reached a deal on the final text of the provision to bolster both the Committee on Foreign Investment in the US and the US export-control system, in an effort to block Chinese and other foreign transactions that could harm national security,” disclosed Senate Majority Whip John Cornyn.

The bill was previously strongly resisted by some lawmakers and big companies out of their worries that the overseas investment will face excessive restrictions.

The US administration’s “America First” policy did not win it expected supports. US officials and public are up in arms about Trump’s plans to impose import tariffs on cars and auto components, said a Deutsche Welle report on Friday.

In a hearing held on Thursday, many representatives protested against the tariffs, in a belief that it will result in rising prices of cars, more expensive imported parts as well as tariff retaliation from its allies, according to the report.

Arkansas governor Asa Hutchinson said he will send economic official to China out of concerns that the US tariff may hurt the economy of his state, while pointing out that retaliatory measures from Canada and Mexico worry him more.

The latest survey made by Pew Research Center revealed that more Americans see negative than positive impact for the US tariff against China, the EU and other trading partners.

Nearly half (49%) of surveyed take it as a bad thing for the US, about 40% polled regard it as a good thing, while the rest 11% don’t know how the tariffs will affect the country, the research showed.

Trump is misjudging China’s resolve on trade: Bloomberg

Trump’s true purpose of launching a trade war against China has been revealed in a latest article by #Bloomberg on July 13, arguing that the extra tariffs on China mean a longer trade war, with greater damage to the US economy.

Entitled “Trump is misjudging China’s resolve on trade,” the article reported that Trump’s strategy in his trade war with China is to eventually force China into concessions by inflicting sufficient economic pain. That’s the obvious purpose of the $200 billion in additional tariffs he plans to impose on Chinese-made goods.

Trump’s latest moves are a reality show before midterm elections to make him appear tough. But the approach is also mired in misperceptions—and bluntly, plain ignorance—of modern China. To Trump and his advisers, China appears poor, dependent on America, and susceptible to coercion. The reality is that China is a global economic force and that China’s leaders will not be so easily intimidated, the article emphasized.

Team Trump’s first big miscalculation is over economic leverage, according to the article. Because China exports more to the US than vice versa, the Trump administration reckons it has the upper hand. Stephen Moore, a Heritage Foundation fellow and former Trump economic adviser, claimed that the “Chinese economy cannot grow without access to the US market.”

The facts suggest otherwise, it noted. China is now a $12 trillion economy, and far from vulnerable. Julian Evans-Pritchard, senior China economist at Capital Economics Ltd., said in a July 11 report that the total $250 billion of exports facing US tariffs represents only 1.3 percent of China’s GDP, and the damage done by those tariffs might be only around 0.5 percent of output.

The article went on pointing out that Trump is assuming Chinese companies and workers will bear the brunt, but that ignores global supply chains. Hannah Anderson, global market strategist at J.P. Morgan Asset Management, commented recently that “the majority of the value in the imports the US has imposed tariffs on so far comes from other countries besides China.” The tariffs will punish US consumers and companies with higher prices, costing jobs, profits, and growth and roiling financial markets.

Washington tramples on multilateralism with domestic laws

Trade is about competition, collaboration, and above all, a great chance for win-win results. But nowadays US President Donald Trump is using hegemonic clauses like Section 301 and 232 to turn trade into a war, shaking the multilateral trading system through unilateralism, like a bull in a china shop.

Since the end of World War II, a wide range and large scale of global issues have emerged. Quite a few such problems were difficult if not impossible to solve through traditional channels of bilateral negotiations. This led to the rise of multilateralism and organizations such as the World Trade Organization.

The establishment of this multilateral system was essentially led by the US. But Washington is now turning into its destroyer, treating multilateralism as a threat to the US and bringing upon itself more losses than gains.

Many US laws, such as Section 301 and Section 232, are domestic trade laws adopted as emergency measures against declining US competitiveness.

In the 1970s, Japan’s economy grew rapidly with its products occupying a growing number of international markets previously dominated by the US. In this context, Washington passed the Trade Act of 1974 in which Section 301 enforces US rights to addresses “unfair” foreign barriers to US exports and to retaliate unilaterally.

In other words, when the White House one-sidedly believes that its trading partners are practicing unfair trade, it can initiate investigation, make final decisions and reactions all by itself, bypassing the international community. Section 232 is much the same. It authorizes the US president to impose import restrictions on other countries in the name of US national security. Both sections deploy domestic law to deal with international affairs.

While Washington busies itself accusing others of jeopardizing the world order, it itself is becoming the greatest disruptor of the system it once established.

In his new book 21 Lessons for the 21st Century, historian Yuval Noah Harari noted that human tribes coalesced into nations as no tribe could deal with major challenges alone. Today, countries find themselves in the same situation: No power can singlehandedly resolve the constant changes the world is facing. That’s why global consensus is urgently needed.

Multilateralism is one such consensus. China is firmly opposed to unilateralism through substantial practices. It is now a major driving force of global economic growth as well as a crucial player in multilateral mechanisms.

China is doing so not only to safeguard its own interests, but also to maintain the normal operation of the global trading system. In this regard, China shares interests with many other countries.

China is not alone. Multilateralism still matters to many nations. The EU and Japan reached the world’s largest bilateral free trade deal on Tuesday, which shines “light in the increasing darkness,” according to European Council President Donald Tusk. China and the EU are also considering forging a free-trade agreement.

In the current global trade system, there can’t be a unilateral win.