China’s ambassador to the U.S. warned the Trump administration Wednesday that tariffs on China will backfire and Washington will “only end up hurting itself and the world”.
“It [the U.S.] has brazenly abandoned bilateral consensus and insisted on fighting a trade war with China, forcing us to take countermeasures,” Chinese ambassador Cui Tiankai argued in an op-ed published by USA Today.
The White House also went on the offensive Wednesday, as President Donald Trump’s top economic adviser Larry Kudlow placed blame for the trade tensions on Chinese President Xi Jinping.
“I think he [Xi] needs to move,” Mr. Kudlow said during an interview with CNBC’s Jim Cramer about stalled negotiations. “We are waiting for him. The ball is in his court. “
Mr. Cui countered by arguing that Mr. Trump’s justification for trade war is flawed.
On the trade deficit America runs with China, the ambassadors contends that “China has never deliberately sought a trade surplus as the flow of trade is determined by the market” adding that a deficit for the U.S. does not mean America is “losing”.
“On the contrary, thanks to the trade with China, American families have access to more, higher quality, lower cost products,” he writes. “In just 2015, trade with China lowered prices in the U.S. by up to 1.5 percent, saving each family $850 on average.”
As for intellectual property rights (IPR), he says China has made major strides codifying its IPR protection legal system, including paying IPR royalties to foreign right holders, which he claims reached $28.6 billion in 2017.
Ultimately, Mr. Cui argues, Beijing has always sought “to resolve differences through dialogue and consultation” in the four decades since U.S.-China relations have blossomed, with economic and trade relations serving as the bedrock of those relations.
Last week the Trump administration’s trade representatives announced plans for fresh tariffs on a possible $200 billion worth of Chinese goods, just days after Beijing and Washington levied tit-for-tat tariffs of $34 billion on each other’s goods.
While Beijing described those latest threats as “totally unacceptable”, Trump administration officials continued to demand China reform its hardline trade negotiating tactics and curtail the theft of American technology and intellectual property, a major campaign pledge of President Trump.
However, Beijing now feels “betrayed” trade talks that occurred from February to June of this year have meant nothing. It sees Washington as abandoning bilateral consensus and insisting on a trade war.
“With all of this as a backdrop, it is absolutely beyond our understanding that the U.S. government initiated the trade war with such determination,” he wrote. “Does the U.S. government genuinely believe China would possibly yield to such unreasonable policy?”
“Trade bullying will only backfire,” he adds. “There is no winner in a trade war. The U.S. will only end up hurting itself and the world.”
Mr. Kudlow said other Chinese officials, including Vice Premier Liu He, a key economic advisor, are open to reducing tariffs but Mr. Xi is stalling.
“I think Xi is holding the game up,” Mr. Kudlow said. “I think Liu He and others would like to move but haven’t.”
Analysts have noted that thus far Mr. Trump has been vague about what China must offer for the new tariffs to be scaled back.
Mr. Kudlow suggested Beijing knows what it must do — knock down non-tariff barriers, further prevent IP theft and allow foreign firms to fully own their operations, as opposed to relying upon controversial Chinese joint-ventures.
How the trade war is impacting China’s overall economy appears mixed, according to economists. The latest figures show China’s growth rate is within investor expectations, currently running at 6.7 percent.
Retail sales are healthy, as are service sector growth. However, year-to-date figures show the mainland’s equity markets are down 17 percent, from their previous highs.
• Dan Boylan can be reached at dboylan@washingtontimes.com.
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