A trade bully, U.S. turns against the world

In reckless disregard for the rules-based global trading system, the United States has become a capricious trade bully and turned against the whole world.

Following steel and aluminum tariffs placed on countries around the world, the Trump administration has imposed a 25-percent tariff on 34 billion U.S. dollars of imports from China, igniting the largest trade war in economic history. It went further to create a list of tariffs on another 200 billion dollars of Chinese goods.

The administration's unilateral and protectionist approach unsettles global financial markets and risks stalling the hard-won global economic recovery, which has taken 10 years since the 2008 financial crisis.

According to the Economic Analysis and Policy Division of the United Nations Department of Economic and Social Affairs, a steep escalation of global trade barriers could reduce the world gross product growth by 1.4 percentage points in 2019, and slow global trade growth by more than 6 percentage points.

Moreover, eroding the multilateral trading system, at the core of which is the World Trade Organization (WTO), will disrupt existing global trade rules and destabilize the predictable environment that the system provides.

Globalization has left the interests of all countries intertwined, and prosperity will only be enhanced when each country cooperates with its trade partners, not vilifies them.

The hypocrisy and selfishness of the world's largest economy will break up the global value chains and hurt businesses and consumers around the world, including those in the United States. As it stands, among the 34 billion dollars of imports from China that are subject to the new tariffs, 59 percent of them are produced by foreign companies, including American ones.

The U.S. trade move has stirred up firm opposition from countries and regional blocs, including the European Union, Canada, Mexico, India, China, Russia, and Switzerland, who have all filed complaints to the WTO against the country.

It has been proved that unilateralism and protectionism, which go against the times, have no record of success. U.S. trade bullying will be no exception.

As shown in the case of U.S. motorcycle manufacturer Harley-Davidson, which decided to move some production out of the country, the administration's trade policies have already backfired.

Harley-Davidson is just one of the first that looked to set up production outside the United States. One day before the U.S. decision on a list of tariffs on another 200 billion dollars of Chinese goods, the U.S. electric car maker Tesla Inc. announced to open its first overseas plant in Shanghai.

Investors vote with their feet for lower costs and higher efficiency in the interests of their stockholders. The Trump administration's efforts to restrain globalization will be doomed by globalization itself.

"America has taken a turn for the worse" and the great delusion that the United States can thrive by embracing nationalism won't work, Washington Post columnist Robert Samuelson said. 

 

Source: Xinhua