DESPATCH FROM BEIJING | International

When China wants ‘U.S. to return to reason’

U.S. President Donald Trump imposed a fourth round of tariffs on Chinese goods earlier in September in a bid to encourage the American people to stop buying Chinese goods.

U.S. President Donald Trump imposed a fourth round of tariffs on Chinese goods earlier in September in a bid to encourage the American people to stop buying Chinese goods.   | Photo Credit: Getty Images/iStockphoto

Beijing says America’s punitive tariffs are ‘against the laws’ of the market economy

The language used by a Foreign Ministry spokesperson is a barometer of what her government thinks of an issue. Nuance is often the name of the game and spokespersons are appointed to their jobs because they are good at wordplay.

So, when this writer had an occasion to attend the Chinese Foreign Ministry spokesperson’s press briefing in Beijing, the depths of China’s outrage at what is increasingly seen as a trade war with the United States was evident.

Accusing the U.S. of “trade bullying practices,” the spokesperson was clear that such tactics would not work on China. He pointed out that U.S. stock markets had declined sharply and the American actions were “against the laws” of the market economy.

And, then came the punch line: “We hope that the U.S. can return to reason.”

In 2018, Beijing was Washington’s largest goods trading partner with two-way trade totalling $659.8 billion. “Goods exports totalled $120.3 billion; imports totalled $539.5 billion. The U.S. goods trade deficit with China was $419.2 billion last year. Trade in services with China (exports and imports) totalled an estimated $77.3 billion in 2018,” a U.S. government website said.

Punitive tariffs

U.S. President Donald Trump imposed a fourth round of tariffs on Chinese goods earlier in September in a bid to encourage the American people to stop buying Chinese goods. So far, Mr. Trump has imposed tariffs on $360 billion worth of Chinese goods while counter-tariffs have been imposed by Beijing on $110 billion worth of U.S. goods.

In recent tweets, Mr. Trump approvingly quoted U.S. economist Peter Morici as saying that enhanced tariffs would not impact American consumers that much.

“Importers can find suppliers outside of China. Absolutely worth it, we don’t want to be servants to the Chinese! This... is about American Freedom. Redirect the supply chain. There is no reason to buy everything from China!” Mr. Trump tweeted Mr. Morici as saying.

U.S.-China trade relations, it would appear, have come full circle. From trying to accommodate China’s rise, the U.S. under President Trump is now attempting to cut China to size, or at least making an effort to redraw trade ties with China.

It’s bizarre that the U.S., at the head of the free world that championed the market economy after the Second World War and led the charge to make free trade acceptable globally, is now turning inwards because the terms of trade with China are not favourable.

From Beijing’s response, it’s clear that a long trade war will hurt China, but the fact remains that the country has come a long way in being able to deal with challenges that come its way.

There’s little doubt that the trade war is very much about geopolitics and the targeting of companies like Huawei, which has emerged as a major player in the field of 5G technology, as it is about trade.

Clearly aware of the challenges that lie ahead of China, President Xi Jinping last week called for officials to develop a “fighting spirit”. “The struggles we face will not be short term, but long term,” he said last week in Beijing, warning that these challenges could last until 2049, the 100th anniversary of the founding of the People’s Republic of China.

The new Chinese Ambassador to India, Sun Weidong, without naming the U.S., made his country’s position clear on the issue of trade. Speaking in New Delhi last week, he said: “We resolutely oppose provoking trade frictions... We are willing to properly handle differences on the basis of mutual respect and resolve issues through dialogue and negotiation.”

In the midst of all the friction, Xinhua and Western media outlets reported on August 30 that following a high-level conference call between Chinese and American trade officials, another round of consultations to resolve differences had been set for October. “Chinese and U.S. chief trade negotiators agreed to jointly take concrete actions to create favourable conditions for further consultations in October,” the official Chinese news agency reported.

In the past, too, both countries have demonstrated the capacity of pulling back from the brink. But the difference today is the personality of President Trump and his determination to make trade with China a domestic political issue in the U.S. in a bid to secure a second term.

The world is watching how these two countries deal with their trade issues. How they do so could well determine the future of global trade relations.

Amit Baruah was recently in China at the invitation of the Chinese Foreign Ministry

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Printable version | Mar 31, 2020 10:54:22 PM | https://www.thehindu.com/news/international/when-china-wants-us-to-return-to-reason/article29362891.ece

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