US will have to bear consequences
Print Edition
CHINA on Saturday hit out at the latest US tariff hikes on its goods, saying a “bullying” Washington would eventually “eat its own bitter fruit.”
European leaders have also warned US President Donald Trump of the dangers of trade skirmishes with China and Europe, which look set to dominate the G7 summit in France.
Trump yesterday increased existing and planned tariffs on a total of US$550 billion in Chinese goods, in response to new levy hikes announced earlier that day by Beijing on US$75 billion of US imports.
China announced on Friday it will hit US soybeans, lobsters, peanut butter and other imports worth US$75 billion with new tariffs after Washington’s planned duty hikes.
The punitive tariffs of 5 to 10 percent will apply to 5,078 items from the US, starting September 1 and December 15, China’s state council tariff office said.
Beijing also announced it will reimpose a 25 percent tariff on US autos and a 5 percent tariff on auto parts, also starting December 15. China had lifted those tariffs earlier this year as a goodwill measure while trade talks were underway.
China is firmly opposed to the US announcement that it will further raise the tariffs on about US$550 billion of Chinese imports, said Gao Feng, the spokesperson of the Ministry of Commerce, on Saturday.
“Such unilateral and bullying acts of trade protectionism and extreme pressure run counter to the consensus of the heads of state of China and the United States, and run counter to the principles of mutual respect, equality and mutual benefit,” the spokesperson said.
The US announcement on Saturday will seriously damage the multilateral trading system and the normal order of international trade, the spokesperson said, warning the US side is bound to bear the consequences of its own actions.
“China strongly urges the United States not to misjudge the situation, or underestimate the determination of the Chinese people. It must immediately stop its erroneous practices, or bear all the consequences,” Gao said.
Wall Street stocks plunged deep into the red on Friday after US President Donald Trump threatened new retaliation against China.
The Dow Jones Industrial Average closed 623.34 points lower, or 2.4 percent at 25,628.90. The S&P 500 slid 2.6 percent to close at 2,847.11. The Nasdaq Composite dropped 3percent to end the day at 7,751.77.
The losses brought the Dow’s decline for August to more than 4 percent.
EU Council President Donald Tusk on Saturday warned that Trump’s escalating trade tensions with China and Europe could force economies around the world into recession.
If Trump uses tariffs for political reasons it would be risky to the whole world, including the European Union, Tusk told reporters.
Trade deals and the reform of WTO are better than trade wars. Trade wars will lead to recession, while trade deals will boost economy, said Donald Tusk, president of the European Council, on Saturday. He called for putting a stop to trade wars.
Meanwhile, French President Emmanuel Macron, host of the G7 summit in the French city of Biarritz, also warned of the widespread fallout from the trade disputes.
Besides China, the US is currently at loggerheads with many countries, including G7 alliance from trade to security.
Threatening Germany with car tariffs, Trump vowed to tax French wines if Paris levies digital tax on big US technology companies; Casting Canada as a trade villain who “robs US blindly,” he also sniffed at the European integration by encouraging Brexit with a “great trade deal” with London; Withdrawal from the Paris climate accord and the Intermediate-Range Nuclear Forces Treaty one after another.
He even showed his willingness to pull out some American forces in Germany unless Berlin increases defense spending to the 2-percent GDP threshold.
US scholars and business professionals have also called on the United States and China to go back to the negotiating table and resume their conversations in concerted efforts to resolve the recent escalation of the US-initiated trade war.
“My hope is that the two sides will sit down and negotiate solutions to their differences,” said Carla A. Hills, chairman and CEO of Hills & Company, a Washington-based advisory firm on trade and investment.
“The ongoing conflict is harmful to both sides,” noted Hills, also a former US trade representative.
Referring to China’s countermeasures as “appropriate responses,” Jeffrey Sachs, a senior United Nations advisor and economics professor at Columbia University, said that “the main goal of all countries should be to stop the US protectionism and violation of the WTO rules and for all nations to live within the rules of the multilateral trading system under the WTO.”
The United States should change course and uphold the consensus reached between Beijing and Washington at the Osaka Group of 20 (G20) summit, Sourabh Gupta, a senior fellow at the Washington-based think tank Institute for China-America Studies, said.
“Washington must at minimum reverse the steps that it has taken ... and go back to uphold the (two) heads of state consensus reached at the Osaka G20,” said Gupta, calling for sincere and trustworthy bilateral conversations. He noted that the consensus could create “the essential basis for forming trust between the two sides.”
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