China and EU to Stand Together in Meeting Challenges

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Waves of media headlines concerning tariff war between China flood almost every corner of the world. The US president Donald Trump seems to be hellbent on reviving protectionism and has successively declared tariffs or tariff increase on imports, on the list are imports from China, Canada (mainly steel, aluminium product) and EU (mainly cars). At present, EU levies a tariff of 10% on imported cars, compared with 2.5% that the US levies. In June, Trump threatened to levy a tariff of as high as 20% on imported cars from the EU, a real soar from the former figure. “We are left with no choice and have to do something, unless EU reduces tariff on cars imported from the US,” Financial Times quotes Trump as saying.

It’s no easy for those involved to absorb such statement, those who are cornered cannot just wait about and may take retaliatory actions, if this does happen, it will do no one any good. The backfiring will go back all the way to suppliers in the whole world, and the ripple effect may deal a blow also to some third-world countries where cheap labor attracts huge foreign investment and agricultural exports claims a large part of GDP of the country. Take Vietnam, Bangladesh, Myanmar for instance, many companies transfer manufacturing bases to these countries in a bid to cut costs. Speaking of tariff on imports from China, when the US said it would slap tariffs on $34 billion of Chinese imports on July 6. Ministry spokesman Gao Feng commented that about 59 percent of these $34 billion imports are produced by foreign-invested enterprises in China, among them, US ones.

79 - China and EU to Stand Together in Meeting Challenges

China has reiterated its position many times that it will never be the first to trigger or engage in a trade war, but it will never flinch from taking any measures necessary to defend national interest and its people’s well-being. The General Administration of Customs said on July 5th that China will levy tariffs on US goods, as soon as US’ tariffs take effect.

At such moments of seemingly unstoppable trade wars China and EU both face, Beijng has signaled willingness to expand cooperation with EU to cope with challenges. On July 5, 2018, Chinese Premier Li Keqiang attends the seventh Leaders’ Meeting of China and Central and Eastern European Countries in the Bulgarian capital of Sofia.The China-CEEC cooperation, also known as the “16+1″mechanism, is a helpful supplement to China-EU relations, and a good vehicle for China and EU to work together, to safeguard multinationalism and trade liberalization.

Registering protests with Trump administration makes no sense. He regards tariff on imports as a bargaining chip which has the power of forcing trade partners of the US into making concessions. The businessman-turned president seems to be in the grip of certainties of a sophisticated businessman, when playing his tricks in negotiations, he doesn’t mind being more creative in using them. US fires in a protective stance, but will end up taking a hit from the counter-acting force.

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