US-China Trade War Hurts Both While Dragging Down the World

 US-China Trade War Hurts Both While Dragging Down the World

United Daily News Editorial (Taipei, Taiwan)

May 12, 2019

 Translation of an Excerpt

The US announced on Friday that it would hike tariffs on China’s exports worth US$200 billion to 25%; the following day, it handed down another notification: if a trade deal has not been reached within one month, it will impose punitive duties on China’s exports worth over US$300 billion. To this, the Chinese side also claimed that it would be compelled to adopt the necessary "counter-measures." Up to now, the trade conflicts between the two countries have exacerbated into mutual retaliation, not only will the US and China both be hurt, but the opportunity for resuscitation that the global economy has been waiting for has also been dragged down.

Trump declared that following the tariff hike, the US national treasury will be benefitted every year with customs duties revenue over US$100 billion; this rhetoric is fact a Potemkin façade. The initial increase of 10% tariff may have perhaps been jointly absorbed by the Chinese exporters and the US importers; however, once the tariff is increased to 25%, it will necessarily be reflected in the sales price tag. In other words, the increased customs duties will be paid from the pockets of American consumers.

As things now look, the contentious stances of the two big powers will be impossible to easily change; it is inevitable that the two trains will collide head-on. As to the extent of its impact, the global economy will suffer from the disaster, making it harder to recover. The US protectionism has ignited a strong protest from the European Union; in mid-May Trump will hike tariffs on European automobiles, eliciting even more dissatisfaction. On the side of Japan, it has already made concessions in the US-Japan trade talks; now it can only live in a state of deep concerns and unease.

Sandwiched in the chinks of the US-China trade war, Taiwan is situated at the frontline of the impact; Foxconn Chairman Terry Guo believes that the impact is “very, very great.” President Tsai reassured the people, saying "We have adequate capacity to deal with the impact brought by the international situation"; this is only her usual boastful pomposity. With her brain filled with the old thinking of export processing, how is she going to cope with the new situation?

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