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Xinhua Headlines: U.S. tariff addiction -- a cause of concern to global economy

Source: Xinhua| 2019-06-17 15:45:44|Editor: Xiang Bo
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安博电竞 在改革开放和“一国两制”事业进入新时代的重要历史时期,讲话为港澳未来发展擘画新的宏伟蓝图。

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Xinhua Headlines: U.S. tariff addiction -- a cause of concern to global economy

Rick Kimberley operates a tractor at his farm near Des Moines, capital of Iowa State, May 3, 2018. (Xinhua/Wang Ying)

by Xinhua writer Guo Yage

BEIJING, May 23 (Xinhua) -- Since the beginning of 2018, the United States, carrying the flag of "America First," has been enthusiastic about wielding the tariff stick against its trade partners including Mexico, Canada, the European Union (EU), Japan and China.

The U.S. addiction to tariff, denounced by many as a protectionist and unilateralist approach, has become a cause of concern to the U.S. as well as the global economy.

SHOOTING IN ALL DIRECTIONS

The U.S. government has been playing tough with all countries that it claimed are treating the United States unfairly.

On June 1, 2018, Washington unilaterally slapped a 25-percent tariff on steel imports and 10 percent on aluminum, provoking retaliation from trading partners including Canada, Mexico and the EU.

On April 8 this year, it threatened again possible tariff hikes against a number of EU products in the civil aviation sector.

On May 6, the U.S. government said it would begin imposing a 17.5-percent tariff on imported Mexican tomatoes.

Besides, Japan had been in Washington's cross-hairs for its exports of automobiles and car parts to the United States.

And the White House has been especially aggressive towards China. Since March 2018, the U.S. government has repeatedly raised tariffs on China imports, forcing the Asian country to fight back in similar tariff hikes.

While Beijing has demonstrated utmost sincerity in resolving the trade problems, Washington has kept seeking unreasonable gains by imposing maximum pressure, which was the fundamental factor behind the failure to reach a deal between the two countries after 11 rounds of high-level economic and trade consultations.

In an opinion piece, Martin Wolf, chief economics commentator at the Financial Times, wrote that the U.S. government believes in "transactions over alliances, bilateralism over multilateralism, unpredictability over consistency, power over rules and interests over ideals."

COMING OUT OF AMERICANS' POCKETS

The U.S. government has repeatedly claimed that the tariff measures will profit the United States, but few around the world agree.

It is not in the interest of either U.S. consumers or Chinese workers "to have this endless escalation of trade conflict," Jason Isaacson, chief policy and political affairs officer at the American Jewish Committee, told Xinhua.

To silver-haired Iowa farmer Rick Kimberley, "it's a slow-burn, it's affecting us slowly. I mean it's affecting our income."

Kimberley's hunch was right. According to U.S. newspaper the Star Tribune, a total of 84 farms in U.S. Upper Midwest region filed for bankruptcy between July 2017 and June 2018, doubling the number in 2013 and 2014, partly due to raging trade disputes.

"Tariffs are taxes that American businesses and consumers pay," stated a letter sent to Washington a month ago by a coalition named Americans for Free Trade, bearing 151 signatures of a wide range of business associations.

In a report released on May 11, Goldman Sachs revised up its estimate of the tariffs' impact on U.S. core personal consumption expenditures. "The costs of the tariffs have fallen entirely on U.S. businesses and households."

Economists at Moody's Analytics also found that U.S.-China trade disputes would slash U.S. real gross domestic product (GDP) by 2.6 percentage points and cost the economy 3 million jobs by the final quarter of 2020.

A February report by economic consulting firm Trade Partnership Worldwide found that an average U.S. family of four would pay 2,300 U.S. dollars more in goods and services each year should Washington impose an additional 25-percent tariffs on all goods from China.

In three years, while 334,900 workers will gain jobs as a result of the tariffs against China, around 2.5 million workers will lose jobs, seven for every job gained. The tariffs will cost the U.S. economy more than 5.5 million dollars for every job gained, it said.

"The people who are paying tariffs are (in fact) U.S. citizens ... It's coming out of their pockets," said Gilad Alper, head of research at Israel's Excellence Nessuah Trust Company.

JEOPARDIZING GLOBAL GROWTH

With Washington ramping up pressure on China and other trading partners, analysts worldwide have said such self-inflicted tariff hikes will also give a body blow to the global economy.

Global financial markets are experienced turbulence amid growing concerns on U.S.-China trade frictions.

"We are certainly going to see a significant reduction on the world's functional markets. Look at what has been happening on the equity market for the couple of days," said Dawie Roodt, chief economist at African financial services company Efficient Group.

Such gloom will shroud not only global financial markets but also the real economy, analysts noted.

Tariff hikes "will ripple across the global economy and that will definitely be a drag on growth," said Sarah Hunter, chief economist at Australia's BIS Oxford Economics.

In its latest World Economic Outlook report released in April, the International Monetary Fund (IMF) lowered its 2019 global growth forecast to 3.3 percent, down 0.2 percentage point from its estimation in January, saying "the downturn was larger and appeared related to a souring of market sentiment, in part because of trade tensions."

"If investors don't have the feeling that this problem can be solved soon, the appetite for investments ... throughout the world is weakening," said Jean-Claude Juncker, president of the European Commission.

(Xinhua reporters Zhong Ya in Beijing, Yang Chenglin in Washington, Yang Shilong in New York, Xu Jing in Chicago, Wang Zichen in Brussels, Chen Wenxian in Jerusalem, Levi J Parsons in Sydney and Zodidi Mhlana in Johannesburg also contributed to the story.)

(Video reporters: Xie E, Zhao Yuchao, Pan Gepin, Zhen Jianghua, Hu Yousong, Liu Jie, Sun Ding, Xiong Maoling, Lin Yuan; Video editor: Zhang Xinyi)

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