SMM News: on the 10th, the United States launched a 25 per cent tariff on $200 billion of Chinese goods exported to the United States, and threatened to increase taxes on another $325 billion of Chinese goods exported to the United States, with extreme pressure to increase the threat to China.
Some in the United States may have forgotten the fact that history has proved many times that trade wars are destined to hurt others.
In the words of Chinese Foreign Ministry spokesman Geng Shuang on the 14th, the US side is advised to take a look at the response of the international community, listen to the voices of people from all walks of life, calculate the gains and losses of their own interests, and recognize the situation at an early date and get back on track.
Well, to sum up the information of all parties, we might as well settle the account together.
Who does it hurt to impose tariffs?
The United States believes that tariffs will bring considerable wealth to the United States and make the United States stronger. Is this really the case?
After China announced tariffs on the United States on the evening of the 13th, US Dow Jones index futures fell by about 2 percent, the Dow Jones and S & P 500 index fell more than 2.5 percent, and the NASDAQ index fell more than 3 percent.
The turmoil in US financial markets highlights concerns in the US:
The latest tariff escalation is a "too big gamble" for the US economy and will harm US jobs and increase consumer costs, Matthew Shea, co-president of the US national retailers, said bluntly in a statement that there was no winner in imposing tariffs.
Us soybean farmers have fallen into a "desperate situation." they hope that the economic and trade frictions between the United States and China will be properly resolved and will not continue to increase. David Stephens, chairman of the American Soybean Association, has also issued a warning.
Over the past few days, the National Council for US-China Trade, the American Information Technology Industry Association, the Consumer Technology Association, the clothing, shoes and socks Industry Federation, and many other industry associations have issued statements opposing the levying of tariffs by the United States. We urge the US-China economic and trade negotiations to return to normal as soon as possible.
The concerns in the United States coincide with the results of the analysis of many think tanks in China.
Liang Ming, director of the Institute of Foreign Trade of the Research Institute of the Ministry of Commerce of China, calculated the account. Of the $200 billion of Chinese goods imported to the United States that have been taxed by 25 percent, 1150 items have been imported by the United States with a share of more than 50 percent from China. Only 124 items account for more than 50% of China's exports to the United States. This means that these goods in China are not highly dependent on the US market.
Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said: judging from the previous 10 per cent tariff imposed on US $200 billion worth of goods, the Chinese side has borne about 10 percent of the additional costs. Retailers, producers and consumers in the United States account for the remaining 90%. To upgrade tariffs, more will be paid by U. S. importers or import agents.
Can the American economy be left alone?
In the 1930s, the global trade war launched by the United States led to a 66% contraction in international trade, aggravating the Great Depression of the global economy.
The lessons of history are not profound, but now the United States seems to have chosen to forget.
Us White House economic adviser Larry Kudlow admitted in an interview with Fox TV on the 12th that imposing tariffs on Chinese imports to the United States will also have an impact on US enterprises and the economy. Some researchers estimate that an increase in tariffs on $200 billion of Chinese imports from 10 per cent to 25 per cent would increase spending by an average of $767 a year for a family of four in the US and threaten nearly 940000 jobs.
Long-term imports of good and cheap consumer goods from China are one of the important factors in keeping US inflation low. In Liang Ming's view, the escalation of tariff measures in the United States will lead to higher domestic prices, damage to consumer welfare, and aggravate the risks to the US economy.
Research by Goldman Sachs, an investment agency, shows that the imposition of tariffs on US $200 billion worth of goods will lead to a 0.2 percentage point increase in US core inflation. If tariffs are imposed on the remaining US $300 billion worth of Chinese goods, Us core inflation will rise by half a percentage point.
The spillover effects of a trade war will also seriously damage global value chains.
Under the economic globalization, automobile, electronics, aircraft and other industries rely on complex and huge industrial chain to support. According to Chen Wenling, chief economist of the China Center for International Economic Exchange, 73 per cent of the US $50 billion list of goods subject to tariffs on China are intermediate and investment goods, and 78 per cent of the $200 billion list are intermediate and investment goods. With the upgrading of tariffs, the impact of industrial chain changes on the U. S. economy will gradually increase.
Gary Shapiro, president of the American Consumer Technology Association, said in a statement that the US government has formally proposed a "consumption tax or tariff" on American consumers' favorite technology products. Including smartphones, laptops, televisions, wireless headphones, smart speakers and so on, this will make the United States "extremely bad."
Has the United States achieved its goal of reversing the trade deficit?
One of the purposes of the United States in imposing tariffs on China is to improve the so-called trade deficit in goods. However, in the first four months of this year, the total value of China's trade with the United States fell 11.2 percent in renminbi terms, while the trade surplus with the United States widened by 10.5 percent, according to the General Administration of Customs.
For the whole of 2018, the US trade deficit in goods and services totaled $621 billion, $68.8 billion more than in 2017 and the highest level since 2008, according to data released by the Commerce Department in March.
This shows that the United States has gone its own way to promote trade protectionism and has not had the effect of narrowing the US trade deficit. Chen Wenling believes that as far as China and the United States are concerned, the long-term existence and continuous expansion of the bilateral trade balance in goods is the result of the joint action of multiple objective factors, rather than the result of China's deliberate pursuit.
Looking around the world, more and more countries trade with China more than with the United States, embracing the huge potential of the Chinese market.