WTCA: Trade-war tariffs can only push high inflation, weigh on SMEs
Editor's note: Despite of decoupling rhetoric and exhausting high tariff, China-U.S. trade is booming in terms of data volume. Robin van Puyenbroeck, executive director-business development of the World Trade Centers Association (WTCA), said the number proved the economy relation between China and U.S. is so interconnected and intertwined, that tariffs can't change the dynamic of the trade, but only push high the inflation and harm the small- and medium-sized enterprises (SMEs).
Instead of "war," often used to describe China-U.S. trade these days, Puyenbroeck said he prefers to use "rebalance," calling for China, the U.S. and Europe – the three biggest trading blocs globally – to work together to create a more inclusive global trade infrastructure.
Puyenbroeck said the political rhetoric of trade war has not affected China's position in the global supply chain, adding that the Chinese market is most likely to become the largest market in the world. Though China's labor cost is rising, China is still very competitive in productivity, sophisticated logistic infrastructure and high skilled workers – all of these make China the key market for companies to be, he said.
The following excerpts from an interview with Puyenbroeck have been edited for clarity and brevity.
CGTN: Do you think the high tariff is between China and the U.S. sustainable? What's the impact on the real economy?
Puyenbroeck: The tariff there is not going to change the dynamic. You can not decouple and entangle the world's two largest trading blocs, especially after they have been integrated for such a long time and for decades. So I think the tariff is just counter-productive. The victims of the the hefty tariff and trade instability are SMEs.
Tariffs can't regulate how the economy works. In many countries, we see inflation is rising to very high numbers, and it's the consumer and worker who pay the bills of tariff.
CGTN: How do you look at China's position and role in the global supply chain?
Puyenbroeck: China is a very competitive place to be in productivity, labor force and supply chain. Chinese has a very sophisticated logistic infrastructure. All of the things come together that make China the key market for companies to be.
The foreign direct investment (FDI) for 2020 showed China broke a record of $163 billion FDI inflow, the largest in the world. It tells us that money is still flowing into China, and China is still producing more high-end goods here. Companies think in a long-term and very hard way of where to invest their dollars. Given Chinese would be the largest consumer market, it will have a place in any global supply chain.