Winton Dong

dht0620@126.com

U.S. President Donald Trump last Monday passed steep tariffs on imported large residential washing machines and solar cells and modules.

According to the tariff adjustments, the U.S. Government will levy tariffs of up to 50 percent on imported washers for the next three years and of up to 30 percent on solar cells and modules for the next four years.

The move marked the first time that the U.S. Government has ever used the so-called Section 201, an outdated tool under the Trade Act of 1974, to unilaterally impose tariffs on foreign imports since 2001. The move is also in line with the Trump administration’s “America First” strategy aimed to protect domestic producers.

Such steep tariffs are not a panacea. Sky-rocketing tariff adjustments will not do anything conducive for American manufacturers. Protectionism cannot revive struggling U.S. companies and solve the problem of out-of-date technologies and high labor costs in the country. That’s why many U.S. local governments, lawmakers, downstream businesses and the vast majority of the U.S. solar industry opposed the tariffs and worried that high tariffs would do further harm to the U.S. solar industry. The U.S. Solar Energy Industries Association expressed disappointment with Trump’s decision, saying that the move would lead to the loss of about 23,000 American jobs in 2018 and the delay or cancellation of billions of dollars in solar investments. Experts also pointed out that new import restrictions would lead to higher consumer prices and fewer purchases, thus imposing costs on the U.S. economy and common consumers.

Despite that the U.S. Government hasn’t stated it directly, many insiders have hinted that these moves were tailor-made to stunt China, the world’s second-largest economy. As the largest producers in washing machines and solar panels, China will surely bear the biggest pressure. China’s Ministry of Commerce has expressed strong dissatisfaction with the move, calling it an abuse of trade remedies. “China hopes the U.S. could refrain from abusing trade remedies and abide by multilateral trade rules to play a positive role in promoting the world economy,” said Wang Hejun, head of the ministry’s trade remedy and investigation bureau.

By imposing steep tariffs, President Trump is now pursuing U.S. interests even at the sacrifice of close allies. Besides China, some U.S. allied countries such as South Korea, Japan and even India, who are strong in these sectors, will also be greatly affected. Famous South Korean electronics makers Samsung and LG both expressed their concerns over the tariffs. “This tariff is a great loss for American consumers and workers. Everyone who wants to buy a washing machine will pay more, with fewer choices,” Samsung said in the statement.

As a superpower, the United States has put its political considerations ahead of common international standards. While doing nothing to mitigate or solve U.S. economic problems, such unilateral and protectionist measures will surely provoke retaliation. China and other countries that now face trade restrictions may bring complaints to the WTO and take tit-for-tat measures to defend their legitimate interests. If China, the biggest holder of U.S. government bonds, sells some of its holdings, it will very possibly lead to higher interest rates and hence economic recession in the United States.

More importantly, the world economy is currently still in a fragile developmental state and requires the joint efforts of all countries to grow strong. The United States and China are two of the biggest economies in the world. Trade friction between the two major countries is influential enough to shake the rest of the world. If such a friction cannot be properly resolved, it will pose great danger to the nascent global economic recovery and exacerbate a difficult global trade environment.

Both China and the United States want to maintain their economic interests, while asking the other to open more market. Under this circumstance, a tense atmosphere between the two countries is inevitable and understandable. However, lose-lose measures such as high tariffs are surely not a good way to solve disputes. I sincerely hope that both governments will find better ways or even a ray of hope to address the tariff issue based on mutual understanding and mutual compromise.

(The author is the editor-in-chief of the Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)