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Escalating US-China trade tensions does good to none

2019-05-19 12:09:00 Source:Xinhua Author:
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The United States' escalation of trade tensions with China does good to neither party and no one else, said an international trade expert.

 

For the United States, negative effects on the economy come from the fact that tariffs are paid by importers, and most likely passed on to consumers, said Ricardo Melendez-Ortiz, founder and former CEO of the International Center for Trade and Sustainable Development, in a recent written interview with Xinhua.

 

"As importers seek to substitute vendors from China and shift outsourcing contracts, a first wave of price impacts may take place through both increase in prices and lowering of import volumes," Melendez-Ortiz said.

 

He warned that, if US importers fail to find cheaper alternative providers in the long run, further price impacts may hurt many manufacturing sectors, possibly leading to "an inflation spiral."

 

As for China, Melendez-Ortiz said the country's exports to the United Stated would suffer should the imposition of additional tariffs continue.

 

Meanwhile, the expert, also advisor of the Center for China and Globalization, noted that he observed "a resilience and continuing competitive edge" of China's exports in 2018 amid trade tensions.

 

As the China-US merchandise trade accounts for about one quarter of the global trade volume, the consequences of their trade row go beyond the two countries, with both parties' trading partners to be affected, said Melendez-Ortiz.

 

"Domino effects are feared across value chains in multiple jurisdictions," he said.

 

Particularly, he added, the tensions will have repercussions on "Factory Asia," which, with complex value chains, provides products for the global market, particularly electronic products.

 

The United States increased the additional tariffs on 200 billion US dollars' worth of Chinese goods from 10 percent to 25 percent on May 10, and has threatened to raise tariffs on more Chinese imports.

 

In response, China has announced that it will raise additional tariffs on a range of US imports from June 1, and "will fight to the end."

 

Considering that besides the tariffs, trade protectionism is also on the rise in such fields as digital and telecommunication technologies, the world is moving from a stage of globalization "into fragmented systems and markets," Melendez-Ortiz said.

 

He called for efforts to make use of existing negotiation frameworks and resolve the tariff disputes, so that "we may move from an interregnum of disputes into a strengthened global system for benefits of all."

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