WASHINGTON (Sputnik) – Most of the sectors in the US economy will suffer from the growing trade clashes between the United States and China at a time when both countries need to resolve serious bilateral security issues, former consultant to the European Union Paolo von Schirach told Sputnik.
On Friday, President Donald Trump imposed 25 percent import tariffs on $50 billion worth of technology goods from China, prompting Beijing to swiftly levy symmetrical tariffs on more than 600 US products.
“Some sectors of the US economy may enjoy some relief because tariffs will fend off Chinese competitors,” Schirach said. “But higher prices caused by import tariffs will cascade throughout the rest of the US economy, with a negative impact on most sectors.”
Schirach said the escalating economic war may hinder efforts to resolve other issues on the security front.
“Given other contentious issues involving China — sanctions against North Korea, disputes about the South China Sea — adding another major item to the list will likely cause negative political consequences that will affect the bilateral relationship,” Schirach warned.
The United States has legitimate complaints with Chinese trade practices, he added, but Trump’s approach was not the answer.
US companies, the former EU adviser pointed out, are often treated unfairly by Chinese government policies. Beijing often restricts US companies from market access while questionable non-tariff barriers and other onerous obligations are imposed on US investors, he added.
The Chinese government had also forced US companies to share proprietary technologies in order to gain market access, Schirach said. However, the Trump administration’s justification for the trade war was still not well grounded.
“A trade war justified by the fact that China has a trade surplus with the US and that this by itself is evidence of foul play, is not a good way to go about this,” Schirach argued. “In trade wars everybody loses.”
Beijing’s new customs duties on most items will be enforced on July 6. China’s Commerce Ministry also said that earlier trade agreements with the United States will no longer be valid.
Schirach is also the President of the Global Policy Institute and Professor of International Affairs at BAU International University.