Harvard experts: US tariff threats are unwise, destabilizing, counterproductive

I am confident that enough people recognize the importance of the relationship, and that wiser heads will prevail.

RECENT US threats to slap additional tariffs on Chinese imports were met with a chorus of criticism Saturday, with leading experts emphasizing that no winner can emerge from a trade war.

US President Donald Trump’s administration on Thursday threatened to slap tariffs on US$100 billion worth of imports from China, drawing strong opposition from China and threatening America’s own economic growth.

Earlier, the president planned to add tariffs on US$50 billion worth of Chinese goods flowing into the United States.

China will fight “at any cost” and take “comprehensive countermeasures” if the United States continues its unilateral protectionist practices, a spokesperson with the Chinese Ministry of Commerce said Friday.

The trade disputes between the world’s largest and second-largest economies have sent jitters through markets, causing a nosedive in the US stock market.

Gathering at the Harvard China Forum, an annual conference in Boston that focuses on China-US relationship, leading scholars, business leaders and former government officials warned that a trade war will not only yield no winner, but will also destabilize bilateral relations.

“No one’s going to win from the trade war,” Anthony Saich, director of the Harvard Ash Center for Democratic Governance and Innovation at Harvard University, told Xinhua on the sidelines of the event, referring to “a trade war where no one’s really going to win and where we have an unpredictable president that makes resolution of it problematic.”

There were already severe strains in the relationship, Saich warned, and further hawkish rhetoric will only lead bilateral relationship to become more confrontational. The concern was shared by Michael Szonyi, director of the Harvard Fairbank Center for Chinese Studies, who said China and the United States share a “very delicate, important and complex” relationship, not one that “we should put into jeopardy without careful consideration.”

“Constructive engagement has not failed the United States and China,” Stephen Orlins, chairman of the National Committee on US-China relations, noting that the two countries “are not strategic competitors.”

Discussing how the idea of a trade war has formulated in Trump’s head, experts said it came from campaign promises that were built on false assumption.

The campaign-like threats have already been met with strong opposition from US business groups, who are worried that the tariffs may backfire.

“US firms have spoken out strongly against this latest round (of tariff threats) by Mr. Trump,” Harvard Professor Richard Cooper told the forum, predicting the opposition may hurt Trump and the Republican party in upcoming elections.

“Trump has the business community against this policy and that will filter into the Republican members of Congress over time,” the former chairman of the National Intelligence Council said, “And so the American domestic politics of this is complicated and Trump will not necessarily, in my view, likely be on the winning side.”

According to Saich, due to the different levels of development of US and Chinese businesses, US companies are more vulnerable if the two countries engage in a trade war.

“America is in the much weaker position as this (trade war) expands because American business investments in China are strategic, they’re part of a global structure or global value chains and global production,” which makes the United States the side that has “more to lose,” Saich said.

Despite the challenges, the experts still voiced confidence that China-US ties are durable enough for “bumps in the road.”

“I think there’s a lot of potential there for China to work creatively at the non-Washington level,” as exemplified by a previous visit by California Governor Jerry Brown to China to discuss climate change, Saich said.

“There’s a lot more commonality of interest around trade issues around climate issues, around ocean protection outside of Washington than perhaps there is in Washington,” Saich said.

“I am confident that enough people recognize the importance of the relationship, and that wiser heads will prevail,” Szonyi said.

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