Trade and Tariff War Overview
The "Liberation Day" of the United States marked the onset of a trade and tariff war that has not only disrupted domestic markets but also impacted global wealth significantly. China has taken a firm stance against the U.S.'s tariff strategies, highlighting its adverse effects on the global economic order.
U.S. Tariff Policies
- The U.S. tariffs, framed as promoting "reciprocity and fairness," are viewed as violating WTO rules, undermining the multilateral trading system, and disrupting global economic order.
- The actions are described as unilateralism and economic bullying, designed to keep developing countries at a disadvantage.
Global Economic Implications
- Countries making concessions to the U.S. often face increased demands, illustrated by historical events like the devaluation of the U.S. dollar and the Plaza Accord.
- If unchecked, such tariff abuses could lead to another Great Depression.
Global Trade Dynamics
- The U.S. accounts for about 26% of global GDP and 13% of global trade, with significant potential for cooperation among other countries.
- Major trade agreements like RCEP and CPTPP proceed without U.S. involvement, indicating a shift towards de-Americanisation in global trade.
Rise of Developing Countries
BRICS
- BRICS nations represent a significant portion of the global population and trade, contributing over 50% to global economic growth, surpassing the G7 in economic output when measured by purchasing power parity.
China’s Stand
- China's economic growth is a result of self-reliance and hard work, and it remains staunch in countering unjust trade practices.
- China’s countermeasures to U.S. tariffs aim to protect both its own and international trade interests.
India and China Economic Collaboration
- As major developing nations, China and India are poised for collaborative growth, with significant impacts on global economic development.
- The IMF forecasts that China and India will together contribute 36% to global economic growth over the next five years.
In summary, the ongoing tariff and trade tensions highlight the importance of upholding multilateralism and safeguarding the rights and interests of developing countries, especially in the Global South.