U.S. trade fracas with China would have negative impact on global economy, warn Mexican experts

Source: Xinhua| 2018-04-09 12:52:45|Editor: pengying
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MEXICO CITY, April 8 (Xinhua) -- The United States' trade dispute with China would have a negative impact on global economy as it threatens to spread to other areas and regions, warned Mexican experts.

Gabriela Siller, a financial analyst at Banco Base, said a spiraling trade war would have a negative impact not just on China and the United States, but also on the global economy.

The White House first proposed taxes on steel and aluminum imports to protect domestic industries.

Then the Trump administration revealed a list of imported Chinese goods worth up to 50 billion U.S. dollars that will be subject to an additional 25 percent tariff.

Hours after the release of the proposed tariff list, China struck back with a tariff plan of equal scale, targeting a list of U.S. products including soybeans, automobiles, aircraft and chemical products.

On Thursday, the United States threatened to retaliate by imposing additional tariffs on Chinese imports worth 100 billion dollars.

Everything indicates U.S. President Donald Trump's "America First" policy is just getting off the ground with the recent announcement of tariffs on imported goods, according to economist Arturo Huerta, a research professor at Mexico's National Autonomous University (UNAM).

"He means it when it comes to his policy and that is going to spark a trade war, and even a currency war," the author of several books and papers on trade policy told Xinhua.

"The United States also needs a competitive dollar because if the dollar appreciates, the tariffs won't have any effect," Huerta said.

However, according to Siller, the political stakes are much higher for the United States.

"It's important to note that the tariffs imposed on the United States target the agriculture sector, so they could impact the electoral base of Trump's Republican Party," said Siller.

Since Trump unveiled his tariff plan, financial markets have been jittery, as the economies of China and the United States together account for nearly 40 percent of the global GDP, she said.

Simon Levy, founder of UNAM's China-Mexico professorship, warned about the potential effects of the U.S. strategy to apply protectionist policies against China.

"I think this war it (the United States) wants to wage against China is enormously reckless, serious and even dangerous," said Levy.

"We are entering a delicate phase because the trade part will also impact the financial part," he added.

KEY WORDS: U.S.- China