There is no winner in a tariff war and protectionism benefits no one

Recently, the United States, disregarding widespread opposition of the international community, blatantly announced the imposition of the so-called “reciprocal tariffs” on all trading partners, including China and Australia, which severely undermines the legitimate rights and interests of all parties.

The tariff list released by the US government goes so far as to impose a 10 per cent “reciprocal tariff” on remote sub-Antarctic territories such as Australia’s Heard Island and McDonald Islands. Ironically, not even penguins are safe from the US’s trade tariffs.

President Donald Trump announcing the new tariffs on US trading partners.Credit: nna\EMcPherson

A vast majority of countries have expressed strong dissatisfaction and clear opposition to the US’s unilateralism and hegemony. Beyond doubt, China has firmly taken countermeasures to protect its legitimate rights and interests and will resolutely continue to do that.

China released the Chinese Government’s Position on Opposing US Abuse of Tariffs and decided to impose additional tariffs on all products imported from the US.

First and foremost, there is no winner in a trade or tariff war and protectionism leads nowhere.

Against the backdrop of globalisation, countries around the world are closely intertwined by interests. Any unilateral measures would lead to far-reaching global repercussions and no country can stand to gain by harming others.

The US claims that it has suffered losses in international trade and is using so-called “reciprocity” to justify raising tariffs on all its trading partners. This approach disregards the balance of interests achieved through years of multilateral trade negotiations and ignores the fact that the US has long reaped substantial benefits from international trade.

In essence, this is a move to overweight its own interests from multilateral rules, undermine free trade and fair competition, and gravely disrupt the international economic and trade landscape, as well as global industrial supply chains.

History and facts have once and again proven that protectionism benefits no one and leads to tensions in the international situation and damage to global interests. A tariff war will not solve the US’s domestic problems, nor will it “make America great again”.

Eventually, it will boomerang back, hurting the US economy and its own interests. Since February, the US stock markets have plummeted and economic stagflation has emerged.

Former US Treasury secretary Lawrence Summers has even warned that the US faces a nearly 50 per cent probability of slipping into recession.

China urges the US to immediately stop its unilateral tariff measures and resolve the differences with all trading partners through equal-footed consultation.

Secondly, multilateralism is the inevitable choice for addressing the difficult challenges facing the world.

Today’s international system has been seriously affected by unilateralism and power politics. In the face of the bottomless behaviour of the US, which has arbitrarily politicised and weaponised economic and trade issues, a weak compromise will only allow the US to sabotage the international order and rules even more wantonly, dragging the world economy, which has already embarked on the right track of a stable recovery, into a quagmire and an abyss.

The only way to stop the hegemonic and bullying behaviour of the US in harvesting the whole world is to strengthen solidarity and collaboration and to jointly resist.

Former US Treasury secretary Larry Summers says there’s an almost 50 per cent chance the US will plunge into recession.Credit: Bloomberg

The international community, including China and Australia, should firmly say no to unilateralism and protectionism, join hands to defend the multilateral trading system, safeguard a fair and free trading environment and promote the development of economic globalisation in the direction of greater openness, inclusiveness, universality and balance.

Thirdly, economic globalisation is an irreversible historical trend. The mutually beneficial and long-standing co-operation between China and Australia has clearly demonstrated that free trade and international co-operation bring tangible benefits to all countries and contribute to global development.

As a responsible major country, China does not engage in trade barriers, protectionism or unilateralism. Instead, we are long committed to achieving win-win co-operation, seeking greater common grounds with other countries, and injecting stability and positivity into the global economy through high-quality development and high-level opening-up.

As an open economy, Australia has also greatly benefited from globalisation and free trade.

Under the new circumstances, China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world, resolutely uphold international equity and justice, defend the multilateral trading system, ensure the stability of global industrial and supply chains, and maintain an open and co-operative international environment.

In the meantime, China is also committed to working with Australia to implement the strategic consensus reached by the leaders of our two countries, seize opportunities of co-operation, expand mutually beneficial collaboration and promote greater development of China-Australia relations to deliver more benefits and fruits to both countries and peoples.

Xiao Qian is China’s ambassador to Australia.

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