Why the US insists on tariffs even when it hurts them

World
Europe

05:35

The US is trying to take China out of the global supply chain, said CGTN current affairs commentator Einar Tangen, referring to the world’s largest economy going ahead with high tariffs despite it hurting American multinationals operating in China.

Official data showed that multinationals operating in China account for 60 percent of the 34 billion US dollars' worth of Chinese exports on which the US increased tariffs on Friday.

In that case, not only Chinese consumers, but also US manufacturers will suffer the pain if trade frictions escalate, according to Dr. Henry Sun, International Director of Business Research Institute at University of Chester UK.

But the US chooses to continue with tariffs. “If you take a look at global supply chain, almost any product around the world today touches on China before it is sent to its final destination,” noted Tangen.

According to Tangen, US President Donald Trump is making American businesses and consumers to pay for “what he thinks is strategic advantages,” in order to weaken China’s role in the global supply chain, and eventually, China’s role in the global economy.

04:24

And Trump does use the “victim mentality” to gain support from mid- and low-level income groups, as those populations haven’t benefited from globalization after the financial crisis.

“His narrative is ‘I’m great. I can solve everything. And you (mid- and low-level income populations,) are all victims. And we (the US) are all victims. And I’m your only saver.’ This is a consistent message whether he’s on Twitter, or the campaign trail, or even in the office,” Tangen explained.

However, Sun believed that China-US trade tension would not escalate into a trade war. He stressed that the key issue is not the conflicts in trade area.

“On the political point of view, this (trade friction) is all things about how to gain Trump’s political capital. The international cards are serving for Trump’s domestic strategy to win the mid-term election,” Sun continued.