On Aug. 23, a new round of tit-for-tat tariffs between China and the US went into effect. The world's two largest economies have now slapped tariffs on a combined 50 billion US dollars’ worth of products since early July. Meanwhile, officials from both sides have resumed talks in Washington, as the US prepares fresh tariffs on a further 200 billion dollars’ worth of Chinese goods.
Businesses have been the first to take the hit. Jacob Kirkegaard, senior fellow of the Peterson Institute for International Economics, said US businesses have increasingly spoken up against Trump’s trade policy.
“They have done so not only against [trade policy with] China, but also against Trump administration's renegotiation of NAFTA, and the potential for automotive tariffs not just with China but with the rest of the world,” said Kirkegaard.
VCG Photo
“So far it looks like it will be more successful in forcing at least postponement of any breakdown of the NAFTA negotiations or other global auto tariffs. Whereas it is in my belief they will be less successful when it comes to blunting the impact of a further escalation of the trade frictions with China,” Kirkegaard added.
With the US mid-term elections coming up, what can the US business community do to sway things in their favor? Kirkegaard said the only thing they can really do is to support pro-trade candidates from either the Republicans or the Democrats.
“But the problem they will face is that protectionism, especially against China, is one of those areas that has support both in the Republican and the Democratic Party,” Kirkegaard pointed out. “So precisely what US businesses are going to do in the coming couple of months and in the run-up to the mid-term elections is a very open question.”
Hong Hao, managing director and head of research of BOCOM International, warned against the impact of President Trump’s current legal problems on China-US trade tensions.
“The way Donald Trump is taking is a bit disappointing. Now he seems to be in quite a bit of legal trouble. There is a potential for him to be impeached by Congress,” said Hao. “We can't rule out the possibility that Mr. Trump could use trade war as a diversion of attention from his legal troubles.”
World Insight With Tian Wei is a 45-minutes global affairs and debate show on CGTN. It airs weekdays at 10:15p.m. BJT(1415GMT) with rebroadcasts at 4:15a.m. BJT(20:15GMT)