Policy Alert #174 | September 27, 2018
The United States’ latest round of tariffs against China took effect on September 24th, clocking in at approximately $200 billion worth of goods. The tariff will begin at 10 percent, then rise to 25 percent on January 1, 2019. As the battle wages on, are the Rising Powers feeling the heat?
CHINA
China held low-level trade talks with the US late last month amidst smaller tariffs entering into effect, but the effort was unsuccessful in achieving a ceasefire. Ahead of the new sanctions, the Information Office of the State Council published a white paper on US-China trade relations (full text available from Xinhua here) that praises the two countries’ prior economic relations and reiterates China’s positions in the current dispute.
- The People’s Daily, the official paper of the Communist Party of China, echoed the sentiments of the white paper with a careful emphasis on cooperation rather than competition: “The economic and trade relations between the two countries concern the well-being of the two peoples as well as world peace, prosperity, and stability. To deal with China-US economic and trade frictions and promote reasonable solutions, it is important to enhance mutual trust, promote cooperation, and control differences. Cooperation is the only right choice, and a win-win situation can and will lead to a better future.”
- Amidst the state-directed China Daily’s flurry of editorials responding to the new tariffs, the paper reaffirmed its support for resisting the US: “The trade conflict will not force China to succumb to US pressure. Instead, given its economic resilience, it will squarely face those challenges, find the right solutions, and emerge stronger.”
- The nationalist Global Times called for China to stay the course on international cooperation and free trade, asserting that the US will eventually succumb to the ills of its protectionist policies: “China should continue cooperating with the Western world and the US on climate change, anti-terrorism, nuclear nonproliferation, global poverty and stabilizing the financial situation. As long as China keeps its development momentum, the US is doomed to lose the trade war.”
JAPAN
On Wednesday, Japanese Prime Minister Shinzo Abe met with US President Donald Trump on the sidelines of the United Nations General Assembly. The meeting resulted in the announcement that Japan and the US would begin negotiating a bilateral free trade agreement.
- Prior to the announcement, the conservative Yomiuri Shimbun encouraged the government to take the high road and work to resolve Japan’s own trade concerns with the US diplomatically: “Japan must not let its bilateral conflict with the United States devolve into a quagmire, as China’s did. It is important to make the Japan-U.S. negotiations a venue for constructive discussion, which would contribute to the economic growth of both countries.”
- The Japan Times lamented the continuation of the US-China trade tensions: “[A]s trade between the U.S. and China slows, Japanese companies that produce in China or sell in the U.S. will be severely impacted. It is a recipe for a slow-motion catastrophe, one that we hope can be contained. At this moment, the outlook is bleak.”
- The liberal-leaning Mainichi Shimbun was similarly pessimistic about the ramifications a prolonged trade war between the US and China: “It is possible that Trump could trigger a global recession that would deal a serious blow to his own people and U.S. companies. […] Washington should seek a solution through dialogue. Meanwhile, Japan should work together with Europe and others to call for restraint by the warring parties.”
INDIA
- The center-right Times of India attempted to find a silver lining for India amidst the escalation of the trade dispute: “[T]he fallout of the trade war between US and China provides a country like India opportunities which didn’t exist a few months ago. As US and EU companies with a large manufacturing base in China seek to de-risk their operations by shifting some of it out, India must be in the game. So far, it’s the more nimble Vietnam and other southeast Asian nations which have cornered benefits.”
- The left-leaning Hindu, on the other hand, focused on the effects for the international community, which was less rosy: “[E]ven if countries can avoid some of the punitive costs of this battle, global institutions such as the WTO and a myriad other multilateral rule-making bodies will wither away, losing their authority. […] This would, in the much-longer term, be a loss for the world community of nations, many of whom have worked hard to establish and credentialise the post-World War order precisely in order to stave off the dark forces of parochialism that engendered the horrors of that period.”
RUSSIA
- Vasily Amirjanov, contributor to the nationalist Pravda Report, mused in an op-ed on the US’s growing list of sanctions and tariff targets that “the Statue of Liberty will have to be dismantled when the USA imposes sanctions on all countries of the world in an effort to counter its adversaries.”
- State-owned Sputnik News featured interviews with Zhao Xijun, a finance professor with the Renmin University of China, and Guan Zhisheng, an assistant professor of economics at Sun Yat-sen University, in which the scholars asserted that despite the trade dispute, China would avoid restricting investment and business operations of US companies in China.
