By: Azhar Azam
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-09-15/Sino-U-S-trade-truce-could-stop-bilateral-and-global-economic-jolt-K0aXbY3Zx6/index.html
War does not distinguish between friends and foes and elicits unequivocal losses to everyone irrespective of status and nationality.
Trade war is no different. The more than one year China-US trade scuffle has sparked the US federal budget deficit to extend to $1 trillion in the first 11 months of the fiscal year – up by 18.8% as compared to the same period last year.
Trump administration could cheer about the narrowing goods trade deficit with China from $235 billion to $209 billion for the seven-month period of January to July; however the US overall goods trade deficit has wheeled from $501 billion to $513 billion for the same period and even wider from 2017’s $464 billion.
Given the fact that Trump directed $28 billion in aid to the US farmers hurt by the trade war, the declining trade deficit with China he boasted about was effectively neutralized merely by the damage caused to the US farmers in an itching trade war.
While Chinese exports to the world (-1.0%) remained roughly unchanged during January-August and it also counterbalanced its trade deficit by managing its imports (-5.6%) – the US effort to crash Chinese economy fired back.
At the same time, although China’s custom data showed that Chinese goods exports to the US plunged 8.9% to $276 billion but its imports from the US were dropped about three times more than the decline in exports to US – 27.5% to just over $80 billion.
The official data from both the sides corroborates that Trump-waged trade war has triggered more harm to the US economy than the Chinese. So, there is an urgent need from China and the US to take drastic measures to turn the tide before it brutishly jolts the two economies and the global trading system.
While Beijing repeatedly called for bilateral negotiations to end the trade war – US President Donald Trump, as a gesture of good will, delayed the imposition of 5% additional tariffs (from 25% to 30%) on $250 billion of Chinese goods for two weeks from October 1 to October 5.
China responded with more eager as the Chinese Customs Tariff Commission of the State Council has reportedly decided to exclude some US agricultural products including soybeans from the additional tariffs.
In July, China had offered to exempt five private crushers from import tariffs on US soybeans arriving by the end of the year.
Chinese assuaging decision to shelve the additional tariffs gave a tremendous respite to the American farmers who had been crammed into the prolonging trade war. The lull in China-US trade fray exited American agricultural producers and Chinese importers of US farm produce.
On Thursday, Beijing’s conciliatory move stirred Chinese firms to buy at least 10 boatloads or more than 600,000 tons of US soybeans, largest in a year. The record purchases also backed Beijing’s prior claim that Chinese companies have been inquiring about the US agriculture products.
Trump is ecstatic. “It is expected that China will be buying large amounts of our agricultural products!,” the US president said in his twitter post. Earlier in his media talk at the Oval office, he struck an optimistic tone about trade talks with China. “They made a couple of moves (about tariff waivers) last night that were pretty good.”
The affable signals from Beijing are set to roll a favorable pitch for the forthcoming 13th round of high-level economic and trade talks between the two largest economies of the world early next month in Washington.
As the downturn in the manufacturing sector has threatened the US economy, which contracted for the first time in three years in August, the de-escalation in trade war would definitely ease the worries of the US businessmen who have been hovering around the uncertainty of sustainable trade ties between Beijing and Washington.
Speaking during the China-US CEOs Dialogue, US Chamber Executive Vice President and Head of International Affairs urged the sides to “conclude a meaningful, comprehensive, and enforceable bilateral trade and investment agreement in a timely matter.” “There are no winners in a trade war, only losers.”
China has always opposed the idea of trade war and since the start of the trade war, has been calling for a calm attitude to defuse the hostile situation. Beijing believes that the growing bilateral frictions between China and the US eventually slowdowns the global economy, which after all is the linchpin of sustainable economic growth of both the countries.
International Monitory Fund (IMF), the global financial watchdog, has once again warned that the retaliatory tariffs could trim the worldwide economic growth by 0.8% in 2020 and would prompt many losses in coming years including the core manufacturing industry.
While a decline in the global economic growth would mean a lesser global economic activity, the tremors would be felt by the people across the world including China and the US. Only a coherent and heedful approach from both sides could foil such a despairing condition to prevail and the two countries are moving on the right track to protect the bilateral trade interests.
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-09-15/Sino-U-S-trade-truce-could-stop-bilateral-and-global-economic-jolt-K0aXbY3Zx6/index.html
War does not distinguish between friends and foes and elicits unequivocal losses to everyone irrespective of status and nationality.
Trade war is no different. The more than one year China-US trade scuffle has sparked the US federal budget deficit to extend to $1 trillion in the first 11 months of the fiscal year – up by 18.8% as compared to the same period last year.
Trump administration could cheer about the narrowing goods trade deficit with China from $235 billion to $209 billion for the seven-month period of January to July; however the US overall goods trade deficit has wheeled from $501 billion to $513 billion for the same period and even wider from 2017’s $464 billion.
Given the fact that Trump directed $28 billion in aid to the US farmers hurt by the trade war, the declining trade deficit with China he boasted about was effectively neutralized merely by the damage caused to the US farmers in an itching trade war.
While Chinese exports to the world (-1.0%) remained roughly unchanged during January-August and it also counterbalanced its trade deficit by managing its imports (-5.6%) – the US effort to crash Chinese economy fired back.
At the same time, although China’s custom data showed that Chinese goods exports to the US plunged 8.9% to $276 billion but its imports from the US were dropped about three times more than the decline in exports to US – 27.5% to just over $80 billion.
The official data from both the sides corroborates that Trump-waged trade war has triggered more harm to the US economy than the Chinese. So, there is an urgent need from China and the US to take drastic measures to turn the tide before it brutishly jolts the two economies and the global trading system.
While Beijing repeatedly called for bilateral negotiations to end the trade war – US President Donald Trump, as a gesture of good will, delayed the imposition of 5% additional tariffs (from 25% to 30%) on $250 billion of Chinese goods for two weeks from October 1 to October 5.
China responded with more eager as the Chinese Customs Tariff Commission of the State Council has reportedly decided to exclude some US agricultural products including soybeans from the additional tariffs.
In July, China had offered to exempt five private crushers from import tariffs on US soybeans arriving by the end of the year.
Chinese assuaging decision to shelve the additional tariffs gave a tremendous respite to the American farmers who had been crammed into the prolonging trade war. The lull in China-US trade fray exited American agricultural producers and Chinese importers of US farm produce.
On Thursday, Beijing’s conciliatory move stirred Chinese firms to buy at least 10 boatloads or more than 600,000 tons of US soybeans, largest in a year. The record purchases also backed Beijing’s prior claim that Chinese companies have been inquiring about the US agriculture products.
Trump is ecstatic. “It is expected that China will be buying large amounts of our agricultural products!,” the US president said in his twitter post. Earlier in his media talk at the Oval office, he struck an optimistic tone about trade talks with China. “They made a couple of moves (about tariff waivers) last night that were pretty good.”
The affable signals from Beijing are set to roll a favorable pitch for the forthcoming 13th round of high-level economic and trade talks between the two largest economies of the world early next month in Washington.
As the downturn in the manufacturing sector has threatened the US economy, which contracted for the first time in three years in August, the de-escalation in trade war would definitely ease the worries of the US businessmen who have been hovering around the uncertainty of sustainable trade ties between Beijing and Washington.
Speaking during the China-US CEOs Dialogue, US Chamber Executive Vice President and Head of International Affairs urged the sides to “conclude a meaningful, comprehensive, and enforceable bilateral trade and investment agreement in a timely matter.” “There are no winners in a trade war, only losers.”
China has always opposed the idea of trade war and since the start of the trade war, has been calling for a calm attitude to defuse the hostile situation. Beijing believes that the growing bilateral frictions between China and the US eventually slowdowns the global economy, which after all is the linchpin of sustainable economic growth of both the countries.
International Monitory Fund (IMF), the global financial watchdog, has once again warned that the retaliatory tariffs could trim the worldwide economic growth by 0.8% in 2020 and would prompt many losses in coming years including the core manufacturing industry.
While a decline in the global economic growth would mean a lesser global economic activity, the tremors would be felt by the people across the world including China and the US. Only a coherent and heedful approach from both sides could foil such a despairing condition to prevail and the two countries are moving on the right track to protect the bilateral trade interests.