Who will feel the pain? US, China seek ‘economic resiliency’ in endurance test: economists
As trade conflict threatens a complete decoupling, analyst asks: ‘If the US produces everything domestically, why would other countries need the dollar?’
With tit-for-tat tariffs escalating the US-China trade war to never-before-seen levels in the past week, their high-stakes game of one-upmanship could turn into a marathon that tests the long-term resilience of economic and industrial systems, according to prominent Chinese economists.
Meanwhile, officials from China’s commerce and foreign ministries reiterated the nation’s stance in the stand-off – that China would “fight to the end” if the US insists on a tariff war, while welcoming dialogue on a footing of mutual respect.
As the trade war endures with no end in sight, economists have suggested a stronger dose of government stimulus to unleash domestic demand, noting that doing so would be of the utmost importance to China in navigating these turbulent times.
“What China and the US are competing for now is economic resilience,” said Zheng Yongnian, dean of the School of Public Policy at the Chinese University of Hong Kong’s Shenzhen campus (CUHK-Shenzhen).
“Our goal should be to build an industrial system with strong economic resilience; only in this way can we secure a dominant position in the long-term competition with the US,” he was quoted as saying by Xiakedao, a social media account run by overseas-edition staff from party mouthpiece People’s Daily, on Wednesday.
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Trump raises China tariffs to 125%, pauses US levies on most other nations for 90 days
After the series of back-and-forth tariff salvoes, as it stands, Washington has imposed a 125 per cent tariff on Chinese imports this year, bringing the effective tariff rate to about 136 per cent. Meanwhile, Beijing’s new levy on US goods has risen to 84 per cent, also on top of earlier-imposed tariffs.