Trump's Trade War with China Hurts Everyone Involved
Hong Lei, consul general, Consulate General of the People’s Republic of China, Chicago
The trade war initiated by the U.S. government on China, which now includes the possibility of tariffs on all $500 billion worth of goods the U.S. imports from China, hurts everyone involved. The collateral damage of these unilateral protectionist moves includes China, the United States and the world economy. What the U.S. has done jeopardizes China's interests. But it also brings unexpected harm to the global supply chain, undermines free trade, and places great uncertainty on the world economy.
On July 6, the U.S. government levied high tariffs on $34 billion of Chinese imports. Around $20 billion of items on the list are products made by foreign companies operating in China, including many by U.S. companies. The announcement of possible 10 percent tariffs on another $200 billion of Chinese goods would further increase the cost of production for U.S. companies, make consumer products more expensive and bring detrimental results to U.S. manufacturers and consumers.
The present U.S. trade deficit with China does not mean the U.S. is suffering a loss. Huge imports from China help keep the U.S. inflation rate relatively low by providing inexpensive high-quality products. On the other hand, the U.S. has a surplus in services trade with China, which reached $55.7 billion in 2016. As a strategic market, China is a place where American companies profit greatly. U.S. companies operating in China sell a great amount of their products to the Chinese market with a total value of $600 billion.
But the trade war forces China to safeguard its interests, the dignity of its people and the world's multilateral free-trade system. That is why China must fight back with reciprocal tariffs on U.S. products and with a complaint against the U.S. at the World Trade Organization.
Common interests between China and the U.S. far outweigh the differences. China's long-lasting mutual beneficial relations with Chicago, Illinois and other Midwestern states have brought tremendous benefits to both sides. But the U.S. trade moves are causing severe uncertainty and could cause unexpected harm. China hopes that the U.S. government will walk away from unilateral protectionism and resume a reasonable and pragmatic approach to China-U.S. economic and trade cooperation.