The Rest of the world looks on powerless, while China and the USA are negotiating a solution to the trade dispute. New U.S. duties are in force, and experts warn of the consequences for the world economy.
Who has the longer breath in the trade conflict between the US and China? Since US President Donald Trump, the punitive tariffs on imports from China to the value of $ 200 billion (€178 billion), from ten to 25 per cent, has risen the question of the trade is of concern to partners and stakeholders on the international financial markets. But regardless of who starts turning the steering wheel at the end, the consequences for world trade and the world economy are always more, even in Germany, where machine builders and automotive manufacturers are complaining about declining revenues.
Global Brake Tracks
Max Zenglein from the Berliner China-think-tank MERICS, warns of the impact on international trade and Warenstöme played: “A further escalation in the trade dispute could supply the global chains break. For Europe it would not be badly if the US and China. At the same time, the risk that agreements between China and the United States at the expense of European companies.”
The Chinese government allowed the Ministry of Commerce proclaim, to regret the new duties and reserve counter-measures – but I continue to hope that both sides can agree on. And Donald Trump announced on Twitter that he could see “no reason to hurry”, because the US economy am overflowing with power.
So far, the U.S. had not been passed-criminal duties by increasing prices to the American consumer, explains US policy expert Thomas hunter of the University of Cologne. A majority of the costs had remained at the Chinese company to hang. The skid marks in the trade relations, however, are clearly visible: In the first quarter of 2019, imports of U.S. goods to China fell compared to the previous year by almost 32 percent to 28.5 billion dollars (25.4 billion Euro). In the same period, Chinese exports to the US shrank by 8.5 percent to 91.1 billion dollars. Overall, the whole of the trade of both States has declined by 15.4 per cent to 119.6 billion US dollars.
The US bet on buckling of Beijing
“In principle, the American government is betting that the Chinese side is more compliant, because in China there is a kind of social contract: The one-party rule is accepted by the people so long, so long the Communist party will honour its promise of prosperity and security,” says hunter. In Washington, we expect lower growth in China, and that the state and party leadership can therefore make no lasting trade conflict.
In the meantime, the Chinese growth, but the battle for the protection of intellectual property at the Washington-based actors in the foreground stand. And there go the Americans, the question is how to bind in the future, the forced transfer of technology, highlights the Cologne-based political scientist.
The China hard-liners in the White house, the U.S. trade representative Robert Lighthizer (in the article image on the left, with Finance Minister Steven Mnuchin), and presidential aide Peter Navarro argued, “if the United States are so soft in the past few decades, then China will win the confrontation with the United States future leading-edge technologies, and Artificial intelligence.”
The US side, therefore, it is particularly important that binding Commitments regarding the protection of intellectual property rights and the measures to be taken against a forced transfer of technology to Chinese laws. China had committed itself, in principle, already in its accession to the world trade organization WTO. As the middle Kingdom was not, but then, there was disappointment for China’s economic partners in the West.
China’s Vice-Premier Liu He at the 4. April 2019 in the case of Donald Trump in the White house (archive image)
In case of doubt on the side of the USA
Jörg Wuttke, former President of the EU chamber of Commerce in Beijing, is optimistic that it can come to an agreement in the trade dispute: “If we talk about the trading of goods, be it beans Gas, or soy, I believe that we will find a scheme and then you will see the impact it is having.”
Less Confidence shows Wuttke the root causes of trade conflict: “unfortunately, I am very pessimistic about the impact of the technology war between America and China. Because America doesn’t want China to get the best technology, because it is believed that have military implications.”
This would eventually also have consequences for the positions of the EU and Germany, underlines Wuttke: “At the end of the day, we must not forget: We are still – despite all the ‘efforts’ Donald trump – the closest allies of the Americans. And at some point will also provide for us the loyalty question: Are we for China, or we are for America? And the answer is clear!”