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U.S. frequent tariff barriers measures call for greater communication

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Core Tip:U.S. frequent tariff barrier measuresMultinationals call for greater communication to resist the impact of protectionism
U.S. frequent tariff barrier measures
Multinationals call for greater communication to resist the impact of protectionism
With the recent U.S. frequent tariff barrier measures, the global market experienced major shocks last week. All sectors are increasingly concerned that the increased trade frictions pose a threat to future financial markets. Multinational government officials and scholars believe that the United States should act within the framework of the World Trade Organization and abandon unilateralism when the global economy and trade are negatively affected. For this reason, many countries will strengthen communication with the United States in order to reduce and resist rising trade frictions.

U.S. frequent tariff barriers measures call for greater communication
Market worried about rising mood
Following the United States’ announcement on the 8th that it will impose tariffs of 25% and 10% on imported steel and aluminum products respectively, US President Trump announced on the 22nd that it will impose large-scale tariffs on goods imported from China. U.S. unilateral trade protectionism measures that may trigger a trade war frightened global investors. The main stock index of the US stock market suffered a tumble of more than a thousand points. Many institutional experts questioned whether the market could withstand the threat of trade war.
Consultant Liang Zhaoji of HSBC Asia Pacific told the media on weekends that US President Trump has announced that he will levy tariffs on imported goods from China, causing the market to worry about changes in global trade rules and reassessing funding arrangements. This event may have a greater impact on financial markets than trade.
Lisa Eriksson, head of the traditional investment group at Bank of America Wealth Management, said that his view on the future trend of the US stock market turned from optimistic to neutral. She said that from the perspective of macroeconomic fundamentals, the global economy is growing steadily, with more than 70% of U.S. economic indicators being positive and listed companies reporting brilliant results. These factors all support the US stocks to go higher, but the potential trade war and other risks have greatly increased the uncertainty of US stocks.
The spread of trade products and industrial chains under the upgrade of trade friction has also attracted much attention in the industry. Ma Yong, an associate professor of East Asian Studies at the University of Washington in St. Louis, said that China-US trade and industry chains are closely linked, not affecting a single specific product, and it involves a wider range.
The chief economist of China Bank of Hong Kong, Mr. E Zhixi, said that the US’s trade protection has been continuously strengthened and these measures will also damage the US’s own interests. For example, she said that after the United States initiated trade protection measures, its imported commodity prices may face upward pressure, which will, to some extent, push up inflation expectations. Although the new round of tariffs and protection actions is mainly aimed at China, the global supply chain has been highly integrated. U.S. multinational companies have a huge amount of investment in China and their interests will be affected.

Many parties call on the United States to stop unilateral measures
With regard to the rise of trade protectionism in the United States, many governments and industry leaders around the world expressed their worries that they may trigger widespread trade frictions.
At the WTO’s Trade in Goods Trade Council held recently, WTO members discussed the issue of the US steel and aluminum tariff measures proposed by China and Russia. The representatives of the European unio, Japan, South Korea, and Australia all spoke, warning that the U.S. measure was not only It may affect multi-party trade interests and threaten the stability of the rules-based multilateral trading system.
The Chinese representative stated at the meeting that the decision of the US to impose steel and aluminum tariffs was unfounded and violated many WTO guidelines and regulations. China called on the United States to stop taking unilateral measures, abide by WTO rules, and maintain the stability of the multilateral trading system.
The representative of Russia believes that the United States has imposed tariffs on steel and aluminum beyond the WTO's regulations. The Russian side emphasized that it is necessary for the United States to explain the exemption from the tariffs granted to some economies.
At the meeting, the EU representative refuted the United States’ claim to impose steel and aluminum tariffs on the grounds of maintaining "national security." He believed that the U.S. practice was only to support domestic industry development.
In response to many doubts of other members, the United States has not responded positively, but reiterated that it is necessary to implement new tariff measures to deal with the threat of endangering "national security."
Fu Xiaoxuan, an Oxford University professor, believes that since the establishment of the World Trade Organization, the United States has gradually abandoned the “Section 301” and the number of unilateral sanctions has been significantly reduced. The Trump administration’s trade protectionism is largely due to the search for a “scapegoat” for restoring US manufacturing and increasing employment.
Multi-nation consultations have not made positive progress
In response to the growing risk of global trade frictions triggered by the United States, many governments, including China, are actively communicating their good offices in order to minimize the impact of U.S. unilateralism, but the U.S. side’s feedback from many countries is not optimistic.
According to the report of Xinhua News Agency on the 24th, China’s vice premier of the State Council’s China-U.S. comprehensive economic dialogue, Chinese leader Liu He’s appointment with U.S. Munuchin briefed the Chinese side on the latest situation of the United States' 301 investigation report. Liu He stated that the 301 investigation report recently released by the United States violated international trade rules and was not conducive to China’s interests, was detrimental to the interests of the United States, and was not conducive to global interests. China is ready to defend its national interests and hopes that both sides will remain rational and work together to safeguard the overall stability of China-US economic and trade relations. The parties agree to continue to communicate on this.
The difficulty of communicating with the United States is also reflected in other trading partners that are related to steel and aluminum products.
On the 22nd, the United States stated that it will temporarily waive the steel and aluminum tariffs for the European unio, Argentina, Australia, Brazil, Canada, Mexico, and South Korea, and the exemption period will end on May 1. U.S. officials have pointed out that those countries that are not on the exempt list can discuss with the United States how to solve the U.S. national security concerns caused by the import of steel and aluminum from these countries.
In an exclusive interview with the media, Cecilia Malmstrom, Commissioner for Trade of the European Commission, stated that he is not sure what the United States wants to use in exchange for permanently exempt European unio steel import duties. She warned that she would resist demanding that the European unio lower the United States. Car import tariff pressures. Malmstr?m said that the EU has a long list of "trade dissatisfaction" with the United States, including the purchase of the US cargo act and the Jones Act.
"If these problems can be solved, it may benefit both parties. We have always hoped for contacts, but we need to know what may happen in May and to what extent this deadline is real." Malmstrom said .
French President Mark Long believes that the U.S. solution is not satisfactory and U.S. strategy is a bad strategy. Macron warned that if Trump really imposes additional tariffs, the EU stands ready to fight back.
High-level steel industry executives believe that exempting some countries from tariffs is only the first step of Trump's solution. In the future, tariffs and quotas may be imposed. However, Trump has exempted many countries from dissatisfaction with countries that have not been exempted, especially the United States, an important ally country.
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