US creates very bad precedent to break rules of global multilateral trade: expert

The US has created a very bad precedent to break the rules of global multilateral trade, Paulo Robel, professor of Pontifical Catholic University of Rio de Janeiro told People’s Daily.

The US, as the largest economy in today’s global economic integration, will inevitably hurt its own interests through its irrational and unilateral practices, said the professor, adding that such approach will also hurt others without necessarily benefiting itself.

US President Donald Trump recently signed a memorandum, deciding to impose tariffs on imports from China. It has aroused huge attention from the international community.

Many international experts noted that the unilateral move goes against the global trade rules, which will pose a threat to the US, China and even the world. They believe that the US will lose not only the trade war, but also its reputation. As a major country, the US should stay rational and manage differences with China through cooperation, they suggested.

“The decision of the Trump administration to largely impose tariffs on Chinese imports is just the tip of an iceberg of its trade protectionism,” said Daniel Gros, director of the Centre for European Policy Studies. The US used to be an initiator of multilateral trade, but it now is marching against in the opposite direction, the director added.

According to him, the Chinese and the US economies are highly interdependent after 20 years of development, and both of the two will get hurt if one of them starts a trade war.

Henning Vöpel, director of Hamburg Institute of International Economics told People’s Daily that the punitive tariff measures of the US are not only aimed at China. They could be shifted toward the European Union (EU) at any time, so the EU will not stand aside, Vöpel noted.

He pointed out that the trade war might trigger a monetary war, which would bring the most disastrous situation since the global economic crisis in 2008.

Expert Josef Braml from German Council on Foreign Relations explained that the US, driven by trade protectionism, believes global trade is a war to the knife. In addition, the US has avoided the WTO rules and managed to prove the rationality of its policies, which threatens the authority of the WTO. He suggested that the world take actions against the punitive tariff policies of the US, otherwise every exporting country will become a loser in the trade war.

The US, violating trade rules, is pressuring its partner by protectionism, Robel said, adding that it has greatly damaged the global trading system. The practice of the Trump administration will inescapably cause negative impacts on the country’s reputation, one of its core competitiveness, he noted.

Trump once declared that trade wars are good, and they are easy to win. But indeed, the reality is just the opposite, said Paul Krugman, a New York Times Op-Ed columnist.

China’s trade surpluses, in other words, are largely a statistical illusion. In fact, many of the Chinese imports are just products fabricated from parts made in other countries, especially South Korea and Japan, said Krugman.

IPhones are a good example to prove the columnist’s point. These phones are made in China, but China only accounts for less than 4 percent of their price, Krugman explained. Therefore, nearly half of the US’s trade deficits may come from those countries exporting parts to China.

Former US Ambassador to China Max Baucus told People’s Daily that the Trump administration is promoting more antagonistic policies toward China, which will increase the tension between the two countries. However, both the peoples of China and the US hope to maintain a sound relationship with each other, because economic cooperation with China is important for the US. Therefore, the trade war is not in line with the interests of the two countries.

“The next phase is critical, and I hope the two countries could stay calm and focus on important matters: employment and livelihood,” said Baucus, expressing concerns toward the emerging trade war. He stressed that the tariffs are both wrong and dangerous, and such approach will not help solve the trade issues between China and the US. The two countries should stay clear and seek solutions through cooperation, he suggested.