The U.S. China trade war would not be benefiting the former. For the United States, price has been heavier. China has the “martial art” to take of this war. Unfortunately, the unhappy state of trade war between the United States and China goes on.
The United States imposed a tariff of over US$ 200 billion on Chinese goods and Beijing prompted by imposing a tariff of over 60 billion on the U.S. goods. Last year, China exported more than US$ 500 billion worth of goods to the U.S. In contrast, the U.S. sold just US$ 130 billion worth of goods to China. The Chinese exports around 19 percent of goods to the United States and receives around 8 percent of the goods from the United States.
Under the 1974 act, the United States could impose measures against a trading partner if it is deemed to be unfairly harming the U.S. business interests. The trading disputes between the two trading nations could last for over 20 years. The Trump Administration said the tariffs were necessary to protect intellectual property of U.S. businesses, and to help reduce the U.S. trade deficit with China.
This gap is keep widening. The gap is alarming but inevitable and hardly it could be bridged until heaven falls. The US President Donald Trump might see the things falling behind that repairing it with courage. Containment of China’s trade is the hallmark of Trump’s decision and his international diplomacy. America has been spreading uncertainty to world trade by securing his own. He wants to damage China’s trade and build his own, which is not seen. He must be peddling carefully than falling in the river. The Trump Administration scrapped the Trans Pacific Partnership (TPP) and burred the American hopes. Now has been trying to bury the Chinese dream, which is not happening.
The global chain system also favours China than the United States. Vietnam, Malaysia, Indonesia and Mexico, for example, locks to be better countries to shift Chinese exports. By the same token, the Chinese firms might move to other countries to avoid high tech imports from the United States. In retaliatory measures, American wants to avoid investment and investment exchanges with China to punish it for its exports.
This move seems to be illogical. This will be great step to teach a lesson to the United States. The relations between the two countries will not be the same. Some fundamental changes will take place. In the new move, American is turning up with new tariffs. The on-going smooth relationship between the two partner has gone away. These things have been reflecting a change of mood between the two partners.
American think that the rise of China mainly owns to excessive Chinese goods into the U.S. market. But this notion is too simplistic and it ignores the Chinese brilliant policy of export to the world over. Simple to react to this situation through tariffs strict policy would not do and change the desire level as expected by the United States.
However, trade war could only damage the trading relations between the two countries and once trading relations were damaged, it could be proving immense losses to both sides. Trade is not a one-point agenda. It is the two ways. Alternatives would not work for every good being exported to the United States. A retaliatory step in trade matters proves wrong and immature. The most important consequence of U.S. retaliatory measures would be re-globalizing China’s trade with the US but it would be end of China’s trade and China would be emerging as the most viable economy by 2030, while the U.S. might see a slump as predicted by many economists.
The United States may see a world dominated by the rise of China and see its own doom rather than its own rise on the horizon. The rise of China and the demise of the United States would not restructured the world economy. The free market approach along with a number of protectionist measures would continue and affecting the globule at a massive level. May be the United States has been adopting a pretension measures to defend its economic ends and probably would react so strongly if the measures were developed by other countries.
They might brings in a new war between the United States, China, and other countries. The coming war would be between a high-tech America and the Communist-led China and it is unlikely that the Communist joint will be the looser. The G.7 (Canada, France, Germany, Italy, Japan, and Britain) as well as South Korea and Japan have been dismayed by Trump. A Government is direly needed in the United States, which should shun its anti-China propaganda and build strong bonds with the rising country.
The writer is Director of the China-Pakistan Study Center at the Institute of Strategic Studies Islamabad. He writes on East Asian affairs.