Trade bullying self-destructive

The latest proposed tariffs from the Trump administration underline its trade bullying and add fuel to the spiraling tensions in the trade war between the United States and China. Xinhua News Agency comments:

The Trump administration's efforts to slap tariffs on China and other major trading partners are destined to meet with retaliation worldwide as it continues to disregard the global rules, international supply chains and the multilateral trade framework.

The announcement on Tuesday that it is planning to impose tariffs on another $200 billion worth of Chinese imports, mainly agricultural and consumer products, in addition to the tariffs imposed last week on Chinese goods worth $34 billion, has further escalated the trade conflict between the world's two largest economies.

The Trump administration's actions are illegitimate and ill-grounded. It is using Section 301 of the Trade Act of 1974, a one-sided tool that was born and bred in the Cold War era that has been banned by the World Trade Organization, to which Washington had once pledged to commit.

The hawks inside the Trump administration seem to expect their tariffs to break the global supply chains resulting in return of production to the US. Neither expectation will be met, as shown by the US motorcycle maker Harley-Davidson announcing it is moving more of its production overseas. Global investors will vote with their feet for lower costs and higher efficiency in the interests of their shareholders.

Even if the Trump administration really gets its way by disturbing the current global supply network, the sophisticated industries, sufficient labor force and snowballing middle-class market in Asia will warrant a re-integration of supplies inside the region.

In sharp contrast to the nosediving of US popularity among investors since the Trump administration announced tariffs, China's recent commitment to further reform and opening-up has been attractive to Tesla and BMW.

Tesla has announced it will open its first overseas plant in Shanghai, with a planned annual capacity of 500,000 electric cars. BMW is also reportedly thinking about expanding its investment in China. The German automaker has warned that the US tariffs on imported motor vehicles would further switch off foreign investments and domestic jobs.

Washington has overpromised and then underdelivered on its commitment to free trade. But its misconduct will not go unchecked. From China to Europe, from Mexico to India and Russia, its tariff tricks have paralyzed trade consultations, and made Washington an object of resentment and derision.

The tariffs also mean US companies and citizens will pay more, and result in choked domestic investment and consumption. US enterprises, people in the US and the US economy are going to feel the pain of the Trump administration's willfulness.