Tariff practices of US 'damage global economy'

World
Europe

The extreme trade protectionism practices conducted by the US have damaged the world economic order and trade system and undermined the global value chain and labor division system, according to a white paper released by China on Monday.

The US government has attacked rules and mechanisms of the World Trade Organization (WTO), such as refusing to include "against trade protectionism" into a ministerial statement and obstructing the selection process of WTO appellate body members, the document says.

Trade has been a crucial driving force for the global economy, whose reliance on trade has been jumped from 17.5 percent from 1960 to 51.9 percent in 2017, according to data from the World Bank.

The world economy is just stepping out of the aftermath of the global financial crisis but the wide trade friction caused by the US will have a negative influence on the weak economic recovery.

Meanwhile, retaliatory measures that other countries have to take will lead to disorder in the world economy and trade, further damaging the global economic recovery, the white paper says.

According to an outlook report released by the World Bank in June, the growing tariffs will have huge negative impacts on global trade, especially on emerging markets and developing economies.

However, they are not the only victims. The US economy is also undermined by its trade protectionism measures which increase the cost of manufacturing industries and hurt the American job market, according to the white paper.

About 95 percent of Chinese products on which the US imposed additional tariffs are parts assembled in the "Made in USA" final products and the tariff increase will hurt US enterprises eventually, according to a report from the Peterson Institute for International Economics.

More than 150,000 jobs in the state of North Carolina and 6,500 jobs in South Carolina will be directly influenced by retaliatory tariffs from other countries.

The tariff imposed by the EU on US products will bring 30 to 45 million US dollars in losses in 2018 to Harley-Davidson, a well-known US motorcycle maker.

Negative consequences in the investment field have also begun to emerge in the US due to protectionism, the white paper contends. Companies are staying out of the investment market because of their declining confidence in the US economic environment. Accordingly, the net inflow of foreign direct investment has slowed.