US Federal Reserve (Fed) officials have been concerned that a large prolonged trade dispute could hurt business sentiment, investment spending and employment, according to the minutes from its latest meeting.
“The trade war has not yet hit American industry fiercely, but would of course bring negative impacts in the long term, and “Trump doesn’t seem to be aware of this,” according to Daryl Guppy, the president of Australia China Business Council of the Northern Territory.
The Trump administration's spin for “selling” the tariffs to American firms is “short term pain for long term gain”. But Guppy said American companies would not buy that line.
From his perspective, as for many American companies, “their virtual profits are purely in China, not in exporting to America, but within China’s marketplace.”
“Tariffs would impact on American firms, American logistics chain, and lead to the growth of the US inflation level,” Guppy explained. “And if the short-term pain has not disappeared quickly, international companies may suffer more pains in the long term.”
Echoing Guppy’s opinion, Li Yong, a senior fellow of China Association of International Trade, noted on Thursday that the Americans have probably just started to feel the impact of the trade war, “but the full-blown impact is going to take place before the end of this year.”
“In the very beginning, the list of tariffs was short, the value it covered was small, and now we are looking at 200 billion US dollars’ worth of goods. And eventually, probably, it’s going to cover every item China exports to the US, which will produce unexpected damages and consequences undesired by the designer of trade war,” Li stressed.
As to the upcoming round of China-US trade talks, Li commented that the result of negotiations will be determined by how both sides view their future bilateral ties and what they put on the table.
“What really matters are the positions from which each side looks at each other and how they are going to treat each other in the future,” Li told CGTN.