The international trade order will be damaged, and both the United States and China will suffer if Washington imposes further tariffs on Chinese goods, according to a World Trade Organisation official, who said the body had a vital role to play in resolving the conflict.
Speaking at an Asia-Pacific Economic Cooperation (Apec) panel discussion in Papua New Guinea on Friday, China’s Yi Xiaozhun, one of the WTO’s four deputy director generals, said the threat of an escalation in the hostilities was “worrying everyone”.
He was referring to comments made by US President Donald Trump in September that Washington was considering imposing trade tariffs on the US$267 billion of Chinese imports not subject to the duties.
“Those tariffs, if implemented, will have a huge impact on trade, investment and global economy,” Yi, a former Chinese vice-minister of commerce, said.
Since July, the United States has imposed tariffs on US$250 billion worth of Chinese imports and threatened to increase the rate on US$200 billion of them to 25 per cent from 10 per cent in January if China retaliated. At the same time, Beijing has slapped tariffs on US$110 billion worth of goods it imports from the US, representing about 85 per cent of the total value of goods it bought from America in 2017.
“I think we can use two words to characterise the current situation: uncertainty and tension. Businessmen are already holding investments,” Yi said, adding that the trade war was damaging growth in global trade.
“Both China and the US will be hurt. It’s not healthy for global production,” he said, urging international organisations, including the WTO, to act “urgently to address the concerns”.
In September, the WTO lowered its forecast for growth in the global goods trade for 2018 to 3.9 per cent, from 4.4 per cent in April.
While Chinese President Xi Jinping is set to meet Trump on the sidelines of the G20 summit in Argentina at the end of the month, Yi said the WTO had a vital role to play in finding a peaceful resolution to the trade war.
“Trade tensions can be addressed only by global governance and the WTO is one of the major pillars of this global governance … and can [provide] a peaceful solution to trade disputes,” he said.
But the WTO’s rules needed to be updated to suit “21st century global trade”, he said, adding that he was aware the organisation was “not perfect”.
Yi did not specify what reforms to the 23-year-old trade organisation were necessary, saying only that it would be up to “our members to decide”.
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