The United States and China opened the 'biggest trade war in history'
According to the Chinese Ministry of Commerce, the United States 'launched the largest trade war in economic history so far'. At 12:01 am Eastern Time on the 6th, the US tariff list came into effect. China imposed a 25% tariff on US$34 billion worth of goods. Fight back.
This is just the beginning of a trade war. Earlier this year, Trump ordered the United States to impose tariffs on China's $50 billion worth of goods. China said it would return tariffs of the same size. The list of 34 billion goods that came into effect this time is the first. In part, experts predict that this trade war will continue to escalate.
What is the impact on China and the United States?
Trump claims that tariffs on China are designed to stop 'transfering American technology and intellectual property to China in an unfair manner' while protecting US employment. But in a real trade war, it is hard to say who is the winner.
Ding Shuang, China's chief economist at Standard Chartered Bank, told the BBC that tariffs may protect some industries, but consumers in both countries will pay a higher price for this, and the industries hit by the tariff lists on both sides will suffer losses. In China, it is mainly aerospace, electronic communications, artificial intelligence and other industries that benefit from government policies. For the United States, the first round of hits are mainly in the agricultural and automotive industries.
Ma Jun, a member of the Monetary Policy Committee of the People's Bank of China, said that the current stage of trade war has limited impact on China's economy. The list of tariffs of 50 billion yuan on both sides may cut China's GDP growth by 0.2 percentage points.
Ding Shuang believes that in addition to trade considerations, it is more difficult to assess the impact of lack of confidence, the most important of which is reflected in the stock market reaction. According to the New York Times, as of last week, the Chinese stock market has fallen from the January high. More than 20%.
The focus of this friction is not limited to trade. Mangan Greene, chief economist at Manulife, believes that trade is only a 'small episode' in tension between the two countries. The field competes for the contest of leadership. 'The trade war can't make them really achieve their goals, but a way of spying on each other,' she told the BBC.
Key list of both parties
US list:
A total of 1,102 projects, worth about 50 billion US dollars.
The list is divided into two parts. The first part has 818 projects, which have appeared in the April list, worth about $34 billion, and will be taxed on July 6.
The second part is a new 284 projects worth US$16 billion, mainly including semiconductors, electronics, plastics, etc. The United States claims that these products benefit from industrial policies such as 'Made in China 2025'. This part of the list will be subject to public review, specifically The effective date is not fixed.
Compared with April, the new list has removed flat-panel TVs, medical breathing instruments, air-conditioning components, etc., but will still target the automotive industry.
China list:
Involved in 659 items, worth about 50 billion US dollars.
The list is also divided into two parts. The first part has 545 items, worth about 34 billion US dollars, including agricultural products, automobiles, aquatic products, etc., taxation from July 6.
The second part is worth 16 billion US dollars. The specific implementation time will be announced separately.
Taiwan and South Korea will be 'particularly vulnerable'?
According to Reuters, there is currently no evidence that China and the United States are negotiating in the final stage. This means that there may be no improvement in the short-term situation. 'I don’t think any party will make concessions on this critical issue, things will only get more and more Deteriorating, 'Green is also thinking so.
Given that this is the world's largest economy, it is inevitable that the other trading partners of the two sides will be affected. Ding Shuang pointed out that Taiwan and South Korea may be particularly vulnerable to the Sino-US trade war.
He explained that this is because Taiwan and South Korea provide a lot of intermediate products for China's exports to the United States, and they are also in the industrial chain of US exports to China. 'This is like hitting twice, 'Ding Shuang to BBC Chinese Said. 'This is in general terms, not for the first round of the list, but in the case of a comprehensive trade war, the two economies are easily affected by two-way effects.'
The key is the strength of the United States
What is the development of this trade war? This is still difficult to say. But Trump said that the remaining 16 billion list in the 50 billion list will take effect within two weeks. If China continues to retaliate, it will consider the value of China. The $500 billion product is subject to tariffs, which is roughly equivalent to the total US imports from China last year.
This will have a much greater impact on the Chinese economy. Previous analysis has shown that if the United States completely stops importing goods from China, China's GDP will fall by 3 percentage points.
Ding Shuang believes that if the tariff list exceeds 50 billion, the difficulties faced by the United States will increase. The list of 50 billion has been continuously demonstrated to minimize the loss of the United States. If the scale continues to expand, the cost of the United States will inevitably Will rise.
He said that given China's dependence on external economic demand is greater than that of the United States, China's losses will be greater in this trade war, but the next trend may depend on how strong the US's ability to withstand losses. As the trade war develops, Negotiations should start again as the impact on daily life, the election landscape, and the US economy becomes more prominent.
It is almost certain that regardless of whether the trade war will end, the friction between China and the United States will continue. 'The bilateral contradictions will continue to exist, because this is not only a trade issue, but more a strategic opponent, so the United States It is still possible to take investment and export restrictions in areas such as technology to slow down the pace of China's catch-up, Ding Shuang said.
