The ongoing tariff war between the US and China has gone from bad to worse, and it looks like a solution is not forthcoming anytime soon.
Now 10-months old, the situation has taken a serious turn for the worst.
This week’s blacklisting of Huawei – one of China’s biggest IT companies – has made it difficult if not impossible for some sort of settlement acceptable to both sides to take place.
The trade war where tariffs were raised on various products by China and the US on a tit-for-tat exchange is not doing either side any good. From our end, American farmers will be among the hardest hit, along with ordinary consumers. It is safe to presume that the same thing is happening with China’s consumers.
The whole world is watching because the US and China are the world’s two biggest economies. It is a truism to say that when the two big boys sneeze, the rest of the world catches the flu.
Should the tariff war worsen, the consequences can be devastating for both. Production in various industries can nosedive and jobs can be lost on a massive scale.
Like it or not, China’s impressive economic growth in the last few decades is essentially a creation of the US. Before then President Richard Nixon took the surprising step of heading to Beijing and shaking the hand of Chinese leader Mao Zedung back in 1972, China was nothing more than a developing country with most of its population living in extreme poverty.
When the US granted China most favored nation status, trade between the two skyrocketed. Very literally, millions of Chinese were elevated to middle class status, thousands of millionaires were created, and numerous industries were born.
So many jobs were created on both sides that it became imperative for the two to maintain friendly diplomatic ties.
On the negative side, China became so wealthy that the country could invest heavily in its military. No longer did it have the world’s biggest armed forces, China could also afford to modernize its military.
This is not to say that China should not have a potent military. It is every nation’s right to be able to defend itself.
It’s on the economic front, however, that no wars should be fought whenever possible. And when it does take place, at the very least the warring parties should fight it out on a level playing field.
We leave it up to the experts to determine who is at fault in the US-China tariff war. What must be avoided at all cost is the closure of stores that sell mostly China-made goods all over the US.
President Donald Trump has always prided himself in being a master dealer. That claim is now being put to the test.
Like all problems, there are good solutions and there are bad solutions. There are also necessary compromises that may be the best option.
Like the rest of the world, we are hoping that the US-China tariff war ends soon. It’s one global headache that we can all do without.