Sunday, January 29, 2017

America, China and the risk of a trade war

On the campaign trail, Mr Trump deplored China’s currency manipulation, accused it of flouting global trade rules and threatened a 45% tariff on its exports. The White House website, without naming China, promises “to use every tool at the federal government’s disposal” to end trade abuses.

However, the article also points out that ramping up tensions would risks Chinese retaliation. In 2009, when America imposed tariffs on imports of Chinese tyres, China started importing goods from other countries instead of America to fight back.

Mr Obama used to craft a multilateral trade agreement, called Trans-Pacific Partnership, to protect American workers against “unfair” competition. But Mr Trump scrapped it recently. We don't know what would happen next but as long as Mr Trump fights China on WTO rules, the world should avoid a trade war.

http://www.economist.com/news/finance-and-economics/21715656-trade-tensions-will-mount-destructive-trade-war-can-still-be


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