Commentary: Washington's trade bullying will come home to roost

Source: Xinhua| 2019-05-22 15:06:50|Editor: xuxin
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BEIJING, May 22 (Xinhua) -- In the name of "fair trade," trade hawks in Washington are waging a global assault on the flow and the spirit of free trade.

Because of Washington's hegemonic hubris, the global economy is under huge downward pressure, and the long-established international rules that govern global trade transactions are in serious jeopardy.

"We will not allow the WTO Appellate Body and dispute settlement system to force the United States into a straitjacket of obligations to which we never agreed," said the Office of the United States Trade Representative in a March 2019 report, a public demonstration of insolence.

With China in the crosshairs of U.S. tariffs, such U.S. allies as the European Union, Canada, South Korea and Japan also cannot get away. "With friends like that, who needs enemies?" European Council President Donald Tusk spoke of Washington at a news conference in May 2018.

The principles of equality and consultation are instrumental in maintaining international economic and trade relations. It means that for a trade deal to succeed, all parties, while respecting market choices, need to treat each other as equals and respect their legitimate demands. It seems that the United States does not care about that.

As Washington is bullying its trading partners worldwide, it is also damaging the already gloomy prospects of global economic recovery.

A minor global trade war where tariffs rise 10 percent would reduce GDP of most countries by 1-4.5 percent, and a 40-percent hike in tariffs would cause a deep global recession, according to an August 2017 paper co-authored by Warwick J. McKibbin from the Australian National University.

"The Smoot-Hawley tariff of 1930 comes to mind," said McKibbin in an op-ed of the Brookings Institution. The tariff nine decades ago further fueled protectionism worldwide and drove the economy deeper into the Great Depression. "It was driven by similar isolationists arguments that the Trump Administration now relies on."

As other parts of the world face the crunch, it has too taken a toll on the United States. By the end of 2018, import tariffs were costing U.S. consumers and the firms that import foreign goods an additional 3 billion U.S. dollars per month in added tax costs, according to a study by the Federal Reserve Bank of New York, Princeton University and Columbia University.

"By now, it is likely no surprise to American families that tariffs raise the cost of living," said Mary E. Lovely, a professor at Syracuse University, in March in a CNN article. "These tariffs burden American households and producers and offer no relief from the problems they were supposed to solve."

A nation keen to flex muscles may get some unwilling concessions in the short term. In the long run, its credibility will go down the drain.

"A country's attractiveness is based on the deeds of that country's leadership rather than on its culture and political value," said Yan Xuetong, a professor at Tsinghua University in Beijing, in his new book "Leadership and the Rise of Great Powers."

"This argument can explain why US soft power declined so dramatically after the Trump administration had been in office for only half a year, even though American culture and political values remained the same," he argued.

In the face of Washington's aggressive trade policies, many around the world have begun to fight back.

WTO Director-General Roberto Azevedo in September 2018 said countries have already launched roughly 30 disputes at the WTO that year, the most since 2002, among which about 20 of the cases stem from the tariffs Washington imposed on other WTO members.

As Washington further escalates trade tensions, China will join hands with others around the world to reject its bullyism, uphold multilateralism and share development opportunities. At the end of the day, the trade warmongers in Washington will know that a trade war is bad, and nobody will win.