As the US and China impose tariffs on thousands of products in an escalating trade war, we ask what’s next.
The ongoing and protracted tit-for-tat trade dispute between China and the United States has intensified this week — so much so that it prompted a warning from the Organisation for Economic Cooperation and Development (OECD).
The Paris-based think-tank says the world’s economy can’t keep growing if things don’t improve on the trade front.
China has now slapped tariffs on nearly $6bn-worth of US goods in retaliation for the latest round of US tariffs on $200bn-worth of Chinese products.
The increased tensions will likely scuttle the renewal of trade talks between Beijing and Washington, reports Al Jazeera’s Scott Heidler from Beijing. While about 5,000 Chinese products, including household goods from vacuum cleaners to bikes, will be targeted, many US businesses are expected to suffer as well.
«Just before the tariffs were announced in Washington, the Chinese commerce secretary said US protectionism won’t only impact the two countries involved in the trade war, but it will hurt the global economy as well,» says Heidler.
Beyond US protectionism, «I don’t think the goal has been demonstrated or articulated well by the [US] president,» explains Greg Swenson, the founding partner of London-based Brigg Macadam, a merchant banking house for emerging and frontier markets.
«What he (Trump) seems to dwell on is the trade deficit and he picks these arbitrary numbers or targets for trade deficit reduction, which is a mistake. What he should focus on is that China is violating all kinds of free-market and open-market policies and rules. The US has taken China to the WTO 16 times in the last couple of years, and they’ve won all 16 times, but that doesn’t seem to be fixing the major problems, which are theft of IP and the complete disregard for free-market principles.»
Swenson says that Trump has «somewhat lost the narrative or the messaging battle because it looks like the US is provoking a trade war, when, in fact, he’s trying to fix something that needs to be fixed.
