When elephants fight, grass suffers
China said on Monday it will raise tariffs on $60 billion worth of U.S.
goods from June 1, in retaliation to the latest round of U.S. tariff hikes and
Washington’s plans to target almost all Chinese imports. This is tit for tat
from China. Both sides will calm down in
future.
Trade war pertaining to enhancement in tarriff by both giant countries US
and China may affect under developed countries. In fact, both countries should
look towards eradication of poverty, pollution, terrorism and boost educational
and employment opportunities across the world rather than down-sizing each
other on tarrifF issues.
What is WHO doing nowadays? The failed organization is not even appearing
to take a chance to conciliate between these two. What will be the implication
of US China trade war in World Economy?
Free trade benefits consumers through increased choice and reduced
prices, but because the global economy brings with it uncertainty, many governments
impose tariffs and other trade barriers to protect the industry. There is a
delicate balance between the pursuit of efficiencies and the government's need
to ensure low unemployment. If the US and the Chinese Governments react off and
on in this fashion, it creates chaos in international trade. Such reactions are
always instinctive and there should be well-thought off responses against each
other, in imposing trade-tariffs.
This trade war is going to change multipolar world into unipolar again.
Trade war between two powerful countries will result in collapse of world
economy and hence they have to come to an understanding through amicable
solution. They have to realize that Trade is nothing but an interdependent
activity on the development of a State or Country.
Clearly the US has bigger, destructive cards to play. A rising China
became friends with villains and foes of the moral. It is reaping the reward
now, bolstering terrorist states and getting slapped around by the bully. China
is bound to be ultimate loser. US has very little to lose.
Trump faces re-elections, Xi does not. Poorer Chinese citizens can put
with a bit more pain whilst well-fed Americans can’t bear a pinprick. Chinese
are behaving too big than they actually are. Trump is doing the right thing by
imposing tariffs on the imports to the States
At the time, when the world is shrinking into smaller unit and being
called as "global village"
because of its magnanimous development on the fronts of communication
and transports. And many countries started venturing their firms of production
houses, in establishing them outside their own countries also, because of
multiple positive aspects. Now the matter related to any big decision against
any one country may not be restricted or
stopped to give effect to that specified
country alone, but on the contrary it's effect will be effecting on many other
countries also, which are directly or indirectly connected to one another. It
is good time to contemplate in that aspect also, which may save the people of
smaller countries from getting adversely affected.
A WTO based global Trade Balance Regime is needed over bilateral
approaches. USA, India, EU, ASEAN, LATAM, Japan etc need to meet and negotiate
an International Trade Balance Regime. Such a regime should provide for
currency manipulation, illegitimate subsidy regimes, provide for trade surplus
bonds with importer central bank, value addition e.g. assembly / manufacture in
consumer country, use of trade surplus for exports from importing country etc and
help establish a sustainable economy for all sovereigns and the world economy.
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