STORY HIGHLIGHTS


U.S. trade unilateralism disrupts global economic order

CNC
Added On July 12, 2018

BEIJING, July 12 (Xinhua) -- By igniting the largest trade war in economic history, the Trump administration has once again proven to be a disrupter to the global economic order.

   Days after the administration imposed a 25-percent tariff on 34 billion U.S. dollars of annual imports from China, with another 16 billion dollars on the way, it went further to create a list of tariffs on another 200 billion dollars of Chinese goods.

   The administration's unilateral protectionist approach undermines ties between the world's two largest economies, unsettles global markets and risks overturning the entire global economy, which has just spent the past decade recovering from the 2008 financial crisis.

   The U.S. disregard to the multilateral trading system, which the international community has safeguarded, will disrupt existing rules of global trade and destabilize the predictable environment that the system provides.

   The United States has benefited from the free flow of goods and capital. But the Trump administration, failing to address the domestic economic imbalance, blames economic globalization for woes its economy is experiencing.

   Under the fallacy that the country has been exploited by the global system, the administration considers trade to be a zero-sum game rather than a win-win process and resorts to trade bullying rather than multilateral mechanisms to resolve disputes.

   With steep tariffs levied on steel and aluminum from around the world, the administration has linked economics to national security and set a dangerous precedent that may tempt others. Moreover, the trade approach may set off a possible sequence of tit-for-tat and dampen future trade and investment.

   The administration's worldview will be proved wrong. Doing so, however, will be highly costly for people around the world, including Americans.

   The U.S. tariff impact will be passed on to domestic businesses and consumers, the working class in particular, who will end up paying more for made-in-China products, while select American farm produce, aquatic products and vehicles may lose their competitive edge in the Chinese market.

   When the Trump administration pulled the trigger, it should have known its action would eventually backfire, and the trade victory it has promised its people is now more elusive than ever.

   According to the Trade Partnership, a U.S. consulting firm, the steel and aluminum tariffs would result in a net loss of nearly 470,000 U.S. jobs after accounting for positive impacts on U.S. steel and aluminum producers. Overall, more than 18 jobs would be lost for every steel and aluminum job gained.

   As Adam Posen, president of the Peterson Institute for International Economics put it, "Trump's soundest argument in his election campaign was that he would not waste American lives and treasure in pointless wars of choice. His launching a trade war would prove, however, to be his economic Afghanistan - costly, open-ended and fruitless."