Trump’s trade policy raises concerns over new cold war mentality

World
Europe

03:20

It’s been more than a month since the US and China levied tit-for-tat tariffs on 34 billion dollars’ worth of goods. New US tariffs on another 16 billion dollars are set to take effect in two weeks, prompting China to retaliate in kind.

Geoffrey Garret, dean of the Wharton School, who's also a reliance professor of Management and Private Enterprise, said during an interview with CGTN's World Insight with Tian Wei that the economic connections between China and the US are so intertwined that there will not be winner or loser in the current trade war.

And he also warns that the Trump administration’s policies may lead many to worry about the return of the cold war.

"Every Apple device is assembled in China by Foxconn. Now a lot of those products are sold back to the US. What we haven’t appreciated enough in America is how important the Chinese market has become to Apple."

"Another iconic American company, General Motors, sells more vehicles in China than it does in the US. The problem for Trump is that those cars are not made in Detroit. They’re made in Pudong, Shanghai. The reality of the global economy today is that the connections between the US and China are far different from the world of political rhetoric in this trade war," said Professor Garret.

Amid the recent China-US trade war, the Trump administration always cites “national security” reasons to protect its industries, which was only a common practice during the cold war era.

However, Professor Garret pointed out that nowadays this is no longer the suitable practice.

"I think you’re absolutely right to say that now almost 30 years since the end of the Cold War, those national security barriers to trade have been reduced. They haven’t been used very much. It is striking that the Trump administration has been willing to use national security provisions as ways to impose tariffs on Chinese products," said Professor Garret.

He also pointed out that another inappropriate behavior coming from the Trump administration is that it’s using American domestic trade law rather than provisions of the World Trade Organization to prosecute its grievances with China.

"I think that China very reasonably could say that the dispute between the US and China should be arbitrated by the WTO, not in American domestic environment," said Garret.

“What the Trump administration is saying is that the system hasn’t worked for us. It’s now time for us to rebalance that. It’s a changing mindset. The win-win mindset is an economic one, and I think it has been a dominative mode of thinking. The win-loss mindset is more dangerous because it’s about geopolitics. Instead of focusing on cooperation, it talks about competition and conflicts,” he added.