Threaten global economic growth and exacerbate trade tensions! IMF Approves US to Levy Tariffs on China

Source: Global Times

[Xiao Qiang, Qingmu, Wang Yi, a special correspondent of the Global Times in the United States and Germany] "The International Monetary Fund (IMF) criticized the US government for imposing tariffs on Chinese electric vehicles, lithium batteries, semiconductors and other products, and warned that they might endanger global trade and economic growth." According to the US Bloomberg News 16, IMF spokesman Julia Kozak made a statement on the latest announcement of the US government to impose tariffs on China on the same day and advised the US: "The open trade policy is crucial to maintaining the US economic performance and will bring greater benefits to the US," the report said, The IMF is increasingly outspoken in criticizing the global impact of US policies, including the rising debt level in Washington, trade restrictions and industrial policies against China, and the tightening monetary policy of the Federal Reserve. On the other hand, after the US government announced a new round of tax increase on China on the 14th, it was criticized in many ways. US government officials tried every means to explain, but were found to be riddled with loopholes and contradictions. US Trade Representative Dai Qi had to withdraw his "grossly wrong" remarks. In Europe, the call for the EU to "not follow the United States" sounded.

First question

IMF spokesman Julia Kozak held a regular press conference in Washington on the 16th. The first question was how the reporter asked her about the US government's imposition of tariffs on Chinese electric vehicles, solar energy products, etc.

Kozak first stressed that the International Monetary Fund supports an open and rule-based trading system, which has been crucial to economic growth and stability in the past decades. "In recent years, trade restrictions (introduced by all parties) have increased significantly. In 2019, we recorded 1000 trade restrictions, which will increase to 3000 by 2023. Such restrictions may disrupt trade and investment, lead to the fragmentation of the global economy and supply chain, and trigger retaliation. Such differentiation may be very costly for the global economy," Kozak said, IMF research shows that the global economic differentiation may lead to various consequences. In serious cases, the global GDP may lose up to 7%, which is equivalent to the combined economy of Germany and Japan. Add in the disruption of trade and technology supply, and the cost will be higher. She urged all countries to resolve their differences within a multilateral framework, and encouraged the United States and China to work together to find a solution to the fundamental problem that exacerbated trade tensions.

On May 14, at Lianyungang Wharf, Jiangsu, the roll on/roll off ship was loading export vehicles Source: IC photo

Bloomberg said that the IMF is increasingly outspoken in criticizing the impact of the policies of its largest and most influential shareholder, the United States, on the global economy. IMF President Georgieva said last month that the global economy is facing risks, "everyone is paying attention to the United States", and specifically mentioned the inflation problem of the United States and the monetary policy of the Federal Reserve.

"China's electric vehicle giants hit by Biden tariff are popular in Brazil." Bloomberg News reported on this topic on the 17th that China's electric vehicle manufacturers were rejected by the US market, but they are looking at those popular countries, one of the largest countries is Brazil. Brazil is the sixth largest automobile market in the world, and BYD and Great Wall Motors have occupied a leading position in the sales of electric vehicles in this country. Now, the two Chinese giants are also building factories in the region, which will help them sell cars duty-free throughout Latin America.

US Trade Representative "Says Wrong"

In order to prove the rationality of imposing tariffs on Chinese products and quell criticism from all walks of life, American officials spared no effort, even ignoring basic common sense. According to CNN on the 16th, Dai Qi, the US trade representative, attracted people's attention this week. She denied on the 14th that the new tariffs imposed by Biden on China would raise the prices of US consumers like those imposed on China in the Trump era. "I think that the link between tariffs and prices has basically been proved to be wrong," said Dai Qi.

CNN said that this statement was questioned by economists and even Biden government officials. Research shows that Trump's tariffs on China have indeed increased the costs of American consumers and enterprises. Biden himself wrote on social platform X in June 2019: "Trump did not master basic knowledge. He believes that tariffs are paid by China, and any new economist can tell you that the American people are paying tariffs." According to the report, an insider told CNN that Dai Qi "said the wrong thing".

Data Map of US Trade Representative Dai Qi Accused of "Missaying"

Alex Durant, an American economist, told CNN that he was "puzzled" by Dai Qi's "grossly wrong" remarks. According to the report, Maury Obstfeld, an official of the Obama administration and the current senior researcher of the Peterson Institute for International Economics, also refuted Dai Qi's statement, "Biden was right in his June 2019 tweet. The higher tariffs are mainly for Americans rather than foreigners. Biden's new tariffs, like Trump's broader tariffs, will exacerbate inflation in the United States. Consumers will suffer losses, and enterprises that rely on imported intermediate parts will also suffer losses. "

The New York Times said on the 16th that the Biden government is betting that the new tariffs imposed on China will be welcomed in domestic politics, which is conducive to his re-election, even though these policies may slow down the energy transition of the United States. Singapore Asia News said that analysts said that the new tariffs imposed by the United States on China were politically motivated and unlikely to lead to an uncontrollable trade war.

The US Diplomatic Scholar magazine said on the 16th that, considering the scope and scale of these new tariffs, as well as the strategic considerations of the Biden administration, there is no need to worry about a new trade war between China and the United States this year, even considering China's possible countermeasures. However, if Trump wins the upcoming presidential election, this relative stability may become unstable.

"The EU should not follow the US"

"The EU should not follow the United States", the Swiss New Zurich reported on the 17th that the United States imposed tariffs on Chinese electric vehicles, which means that the EU may face the same pressure. The Biden administration's move is purely a protectionist act for the presidential election. Although the European Parliament election is to be held in June, the EU should not be guided by this. In terms of subsidies to improve the competitiveness of domestic enterprises, no one is blameless, especially Americans and Europeans. The article argues that it is unwise for the EU to raise tariffs on Chinese products in a hurry in order to protect local suppliers. Competition from China is a good thing for customers. They can benefit from more choices and lower prices. More intense competition will also stimulate suppliers in the EU. On the other hand, Brussels should carefully consider the risk of a trade war, because the Chinese government is unlikely to accept punitive tariffs without resorting to countermeasures.

The Swiss New Zurich newspaper said that "the European Union should not follow the United States". The picture shows the Chinese flag and the EU flag

"Why don't people think about customers?" The German Economic Weekly published a commentary on the 16th, saying that in the dispute about China's auto tariffs, politicians and managers pursue many interests, but not the interests of citizens. Biden wants to win the election, so he wants to promote "America first". Corresponding to this is European Commission President Von Delain, who also wants to win the election, so she calls for "Europe first". The author of the article supports "Otto", a German driver nicknamed "ordinary consumer". He wants a cheap car. He wants to protect the environment, so he doesn't want the government to impose crazy tariffs on Chinese electric vehicles.