Is the US trade war a cover to attack the free trade world?

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The US has placed an additional 25 percent tariffs on imports from China worth 34 billion US dollars on Friday, leading China to impose equal retaliatory measures. Beijing says it has already begun implementing levies on some American goods.

Li Yong, a senior fellow at the China Association of International Trade said the US is now making trade a weapon to bully China. He said it is like a terrorist hiding in the dark in order to attack the free market.

It is interesting to notice that the new US tariffs mainly affect high-tech goods, while China’s countermeasures are mostly focused on US agricultural and manufactured goods.

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In Li’s opinion, it is obvious that the US tends to overpower technological advancement in China. He said the US is going for China’s jugular, and it is reasonable to fight back and hit hard on the products that heavily rely on the Chinese market.

Facing the current situation, people may recall that past trade wars have caused deep economic problems and have the question that what effect is the current confrontation likely to have.

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Li said that because China and the US have the world’s two biggest economies, the trade war will have a global impact. He said the global supply chain will first be disrupted, which will then increase cost around the world. The citizens’ revenues and investment decisions are likely to be changed.

Regarding China, Li said foreign-invested companies in China will be affected. On the list of the 34 billion worth of products, 59 percent of them are produced by foreign-invested enterprises.

In the US, Li thinks business will face high costs while consumers will pay high prices. Additionally, he said the retaliatory actions taken by not only China but also other countries will have an impact on jobs in the US.

Li said not only will the trade war have huge positive and negative impact on China, but also on other Asia countries.

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For countries that once competed with the US to sell products to China, it will have positive impacts on their economy.

However, those countries that sell the raw materials to China, will see negative impacts because the material processed in China that are destined for the US will cost more for those countries to sell and for China to export.

All in all, it will change the region’s fundamental economic growth.