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Editorial: Sever negative chain reaction of retaliatory U.S.-China sanctions

  • June 19, 2018
  • , The Japan News , 8:21 p.m.
  • English Press

The trade friction between the United States and China has become intense. Both countries must continue holding sincere negotiations, thus cutting the negative chain reactions of sanctions and retaliation.


The United States has announced that it will impose punitive tariffs on $50 billion (or about ¥5.5 trillion) worth of Chinese products a year, on the grounds of Beijing’s infringement of intellectual property rights. Washington will implement the duties in stages, starting on July 6.


China has declared that it will impose retaliatory tariffs on the equivalent scale of U.S. products immediately after the United States takes its measures. When it was slapped with punitive tariffs on its steel and aluminum exports to the United States, China also took retaliatory measures.


The United States and China combined account for about 40 percent of the world’s gross domestic product. An exchange of sanctions and retaliatory measures between the two economic powers will increase concern among markets and companies, stagnating the world’s trade and investment.


Such moves would hamper the growth of the global economy, while also exerting serious adverse impacts on both the United States and China.


Using prudence in implementing additional duties, both countries need to aim at settling the issue through dialogue, no matter what.


The United States has listed high-tech products, such as semiconductors and robotics, as items targeted for its punitive duties. It has also launched discussions on restricting China’s investment in the United States.


The string of punitive measures seems to be aimed not only at trimming its trade deficit with China, but also at curbing China’s attempt to build economic hegemony in leading-edge industries.


Trump must change ways


In the United States, there has always been criticism about China spurring on the development of its advanced industries through the provision of massive subsidies and the like, distorting fair competition.


Also strongly running alongside such opinions is the view that the ulterior motive for China’s aggressive investment in the United States is its intention of taking advanced U.S. technology out.


Such concerns are shared by other developed economies, including Japan and countries in Western Europe.


The U.S. awareness of the issues involved can be understood, but U.S. President Donald Trump’s heavy-handed methods, such as brandishing sanctions in blatant disregard of international rules, are inexcusable.


If Washington wants to have Beijing mend its unfair practices, it would be rational for the United States to attempt to solve the issue by cooperating with European countries and Japan in step with the due process of the World Trade Organization and the like.


As long as the United States makes light of international rules itself, it can hardly expect its trading partners to abide with the rules.


Having continually held negotiations, the United States and China have tried to find a way to avoid punitive tariffs. There was a moment where U.S. Treasury Secretary Steven Mnuchin promised China to put the tariffs on hold as China planned to allow more imports of U.S. agricultural commodities.


Trump, however, scrapped the fruits of the negotiations unilaterally, coming up with his idea of embarking on sanctions.


As things are, trust in the U.S.-China relationship, which was being built with such effort, will fall apart, making it impossible for constructive trade negotiations to continue any longer.


Trump should drastically amend his negotiation tactic of using saber rattling to press trade partners to make concessions.

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