Who Wins the Tariff War?

Lately, the word 'tariff' has surged into common usage, often cropping up in news articles and media titles.

The freshly installed U.S. leadership appears persuaded that the global community is exploiting America, leading them to initiate what they call a 'tariff war'—imposing or contemplating the imposition of different tariff rates on countries like China, Mexico, Canada, and members of the European Union, along with suggesting retaliatory duties across all nations.

The global community has been left stunned.

On March 7, at a press briefing, a member of the Political Bureau of the CPC Central Committee and Foreign Minister Wang Yi addressed inquiries about this issue. He quoted an old Chinese proverb: "When your efforts fail, seek the cause within yourself." Wang urged the United States to reflect upon recent events. He questioned what tangible outcomes have resulted from their tariffs and trade disputes. Have they seen an increase or decrease in their trade deficits? Is American industry thriving more than before or less so? How has inflation changed—increased or decreased? And most importantly, how has the quality of life for Americans been affected—is it improving or deteriorating?

The responses to these queries are quite clear. Based on global trade norms, when products subject to taxes have limited substitutes, the financial impact of tariffs primarily affects businesses and consumers within the importing nation.

The data indicates that following the imposition of extra tariffs on Chinese products by the U.S. government in 2018, American importers and retailers absorbed over 90 percent of these increased expenses. These additional costs were then transferred to customers via elevated pricing, thereby significantly boosting inflation rates within the United States.

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Prices for products like washing machines and steel increased by 9 percent to 12 percent because of the tariffs.

The John Deere Corporation, a leading American producer of tractors, had to elevate their prices as a result of rising expenses for raw materials, which consequently diminished the competitive edge of their offerings.

In 2024, when the U.S. government increased the tariff on Chinese electric vehicles to 100 percent, this move might appear as though it aims to 'shield local businesses.' However, in truth, it takes away American consumers' ability to buy top-notch goods at favorable prices and has the potential to boost inflation rates by 2 to 3 percentage points.

Time and again, history and reality have shown that nobody emerges as a victor in a tariff war. Maintaining the global trade system stands as the genuine course for mankind’s progress.

Unilaterally enforcing tariffs is often seen as an aggressive tactic, which ultimately inflicts damage on others without offering any advantages to the enforcer. Beyond self-inflicted consequences, such arbitrary tariff implementation substantially heightens exporting pressures on the targeted nation, disturbs its industrial structure, and has lasting repercussions on its economic progress.

A tariff war disturbs the balance of global market competition and escalates tensions in international trade.

In an interconnected globe where every economy is closely linked, we form a collective with a shared destiny. Thus, true sustainability for all countries can only be achieved through mutual benefit and collaboration. This vision is unattainable without a worldwide multilateral trade framework anchored in rules and centered around the WTO.

At the Beijing Summit of the Forum on China-Africa Cooperation conducted recently, Chinese President Xi Jinping declared emphatically that China would proactively widen its market access and extend duty-free benefits to 100% of imported goods from all least developed nations maintaining diplomatic ties with China—covering 33 African countries. By doing so, China became the leading emerging economy to adopt this approach. This move aims to transform China’s vast marketplace into significant opportunities for Africa.

China remains committed to supporting the multilateral free trade framework and staunchly opposing protectionist measures. Alongside the global community, including nations like Nigeria, China aims to cultivate an open, equitable, and unbiased setting for international collaboration. The country also seeks to advance economic globalization that brings advantages to everyone, ultimately contributing to the creation of a shared global community.

Mr. YDunhai’s article was selected from the News Agency of Nigeria.

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