16:03 GMT02 August 2021
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    US Trade Tariffs – the Straw That Could Break the Camel's Back

    Pivot to Asia
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    The United States is imposing a 25% import duty on steel and a 10% import duty on aluminum. China, which exports large quantities of both metals, will be directly affected. How will China and Asia in general be affected? Will these new actions lead to retaliation, and what does all of this mean for US influence in Asia?

    Yaroslav Lissovolik, a Chief economist with the Eurasian Development Bank joins the program, along with, in the first part of the program, Christina Ran, the international sales director of Sundopt LED lighting Co. Ltd in Shenzhen.

    Christina Ran starts the program describing the atmosphere in China as regards the new tariffs: "Of course this is very bad for China and it is not good for the overseas business of Chinese…" Yaroslav outlines the possible impact of these tariffs on China: "I think this scenario will have direct effects, and indeed if we do see imposition of tariffs and restrictions on imports then we will see vis-a-vis reductions of Chinese exports. This means that the Chinese will need to relocate their exports to other markets. It means that China will increase efforts to build its own alliances, its own regional projects, I believe that more effort is likely to go into such projects as the One Belt One Road project, there will be added momentum for China to develop free trade areas with other developing counties. More effort will be made by China to pursue trade liberalization with opening markets inside the South domain.

    Christina perhaps talks for many Chinese businesses when she says that her business does not put all their eggs in one basket, and has opened many markets, not just in North America. Christina also makes the point that just imposing tariffs will not actually bring the trade back to America, because creating supply chains is not only a matter of imposing tariffs. There is also a question of different mentality of American and Chinese workers, Christina says.

    A far as the threat of retaliation by China goes, Yaroslav says that any trade sanctions carry that danger. "We are precisely in this environment. I think that this is the biggest threat to the sustainability of global economic growth… once we get into a chain reaction of mutual restrictions and retaliations; this is very difficult to stop. It is vital that steps are taken in the high levels of government to try to stop these tariffs and changes in their early stage of development. One of the things that could be done is to involve global organizations like the WTO and the IMF to come up with joint assessments of what the implications of such trade restrictions could be for the global economy. Individual countries should also try to develop bilateral communication regarding this matter otherwise indeed; we are in for something that could be very detrimental for the global economy."

    Yaroslav also says that this is not the first time that we have seen tariffs: "we saw such restrictions coming from the Bush administration…my understanding is that some of the areas where the steel industry is based are in those States which can be called swing states."

    The global economy has not yet fully recovered from the last major global financial crisis. These new restrictions on international trade could trigger off a new crisis that could be the last straw to break the camel's back of international trade. That would be very bad news for all economies everywhere.

    We'd love to get your feedback at radio@sputniknews.com

    Asia, US, China, economy, export, tariffs, aluminum, steel, Trade, metal
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