On April 3, the U.S. Trade Representative Office announced that it will impose a tariff of 25% on $50 billion of Chinese goods based on the section 301 investigations. In response, China announced that it will impose a 25% tariff on 14 categories of 106 products originating in the United States. Chen Wenling, the Chief Economist of the China Center for International Economic Exchanges, said that the United States intends to resolve its own chronic problems through trade wars, which will only make things worse.
The excuse used by the United States to launch the 301 investigation of China is that the US has a huge trade deficit with China. Chen Wenling stated that as a matter of fact, the root cause of the U.S. trade deficit with China is that the U.S. took the advantage of the U.S. dollar as a global credit currency and actively transferred its manufacturing to other countries after the collapse of the Bretton Woods system. At the same time, the U.S. has kept buying cheap goods from different countries, including China to maintain the high level of consumption and welfare, low cost and inflation. In other words, all these countries have made a great contribution to the United States. The US does not appreciate what these countries have done but condemns, or even takes sanction against China, this is a big joke.
In the past five years, China’s contribution to the world economic growth has exceeded 30%. Without China’s contribution, there will be no recovery of the world economy and the United States. The United States not only does not appreciate China, but instead tries to reduce the US-China trade deficit by adopting unilateral trade protectionism. This is absolutely wrong and the US will damage both its own economy and the global economy.
On the 4th of April, China announced that it will impose tariff on a number of American goods, and many of them are mainly exported to China. It will definitely be a major hit to the US if it loses the huge market of China. The U.S. economy has a serious problem and the US government should come up with appropriate remedy immediately. However, the US will only make things worse if it tries to resolve its own economic problem through the trade war.
Wang Shouwen, Vice Minister of Commerce said that China is not willing to fight a trade war because there is no winner in such kind of war. However, China is not afraid to fight a trade war. If anyone insists on launching a trade war, China will follow suit.