Trade War Resolution: Who Has Hurt The New US $200 Billion Tariff? This Trade War Will Not Only Affect China And The US.

Since May 10th, the tariff rate of US $200 billion on goods exported to the United States has increased from 10% to 25%.

So far, the United States has imposed a 25% tariff on Chinese products totaling $250 billion.

Next week, the US tariff measures may escalate again, and China's new round of countermoves is also in the firing line.

Who will pay for the trade friction?

Is the United States really "easy to win" by repeatedly upgrading tariff measures?

What are the losses caused by trade friction?

Recently, many institutions and scholars at home and abroad have made their own prediction based on empirical analysis and model calculation.

From these "bills", we can see clearly that as the two largest economies in the world, Sino US trade friction affects not only the two countries themselves, but also the world economy.

With the further escalation of friction, the loss material will continue to increase.

Liang Ming, director of the Institute of foreign trade, Chinese Academy of Commerce,

In 2018, a total of 250 billion US dollars were included in the tax increase list of China's goods. The export volume of these commodities increased by 9.8% over the same period of the previous year, and China's total exports to the United States increased by 6.7%.

In the first quarter of this year, the export volume of Chinese goods on the list increased by 24.2% compared with the same period last year, and China's total exports to the United States dropped by 13.9%.

In 2018, a total of 110 billion US dollars were included in the counter list of US goods. The export volume of these commodities to China decreased by 4.1% compared with the same period last year, and the total export volume of the us to China increased by 0.8%.

In the first quarter of this year, US exports of goods to China on the counter list fell by 39.8% compared with the same period last year, and the total US exports to China fell by 31.8%.

On the whole, the existing tariff measures have greater impact on the United States.

In the 200 billion dollar commodity tax list, China's exports to the United States account for only 124 of the total export volume of the product, which means that most of the goods on the list are not highly dependent on the US market and can turn to other market exports, which has limited impact on China's foreign trade as a whole. 50%.

Next, with the escalation of tariff measures, Sino US bilateral trade volume will further decline.

Gao Lingyun, researcher of the Institute of world economics and politics, Chinese Academy of Social Sciences

The United States totaled 250 billion US dollars to levy tariffs on goods exported to the United States, China only assumed 9%-10%'s tax burden, and the rest of the 90% tax burden was actually paid by US retailers, enterprises and consumers.

According to the World Bank report, 100% of the tax burden is passed to the United States.

At present, many commodities in tax collection list are necessities of life.

The US demand for these goods will not disappear because of tariff increases, so importers must continue to import and pmit the additional cost down to retailers and consumers.

This time is usually 3-6 months.

That is to say, after this time, the influence will gradually appear.

The impact of tariff increases should be observed from a dynamic, long-term and global perspective.

The US view that trade war is easy to win is short-lived and one-sided.

If we act arbitrarily and continue to levy tariffs unilaterally, the final attack is likely to be a "seven injury boxing" that hurts others.

The world bank, California University and Columbia University:

University of California at Los Angeles and Berkeley, the world bank and Columbia University scholars believe that the tariffs imposed by the US government in 2018 on producers and consumers account for 0.4% of GDP in the United States.

But if other people's income is taken into account, the net cost of tariffs added to the entire economy is 0.04% of GDP.

The chief economist of the world bank, Gao Bo:

Sino US trade friction caused the US economy to lose 6 billion 400 million US dollars, equivalent to 0.03% of GDP.

The Federal Reserve Bank of New York, Princeton and Columbia University:

The increase in tariffs has caused us businesses to lose $1 billion 400 million, and US consumers have increased the burden of US $3 billion.

Federal Reserve Bank of New York:

At present, only about 1/5 of the Chinese goods that are subject to tariffs are consumer goods, but the upgrading of tariff measures will also include toys, clothing and other items.

The impact of tariff escalation on core inflation (excluding food and energy) will rise from 0.1 percentage points to 0.4 percentage points.

Morgan Stanley:

Morgan Stanley reports that Sino US trade friction may be the "most urgent risk" that the world needs to face, and the downside risk of Asian and emerging market stock values will be 8% to 12%.

The International Monetary Fund:

If 25% tariffs are imposed on all trade between China and the United States, the US GDP will drop 0.3% to 0.6% and China's GDP will fall 0.5% to 1.5%.

Li Chunding, Professor of trade policy simulation laboratory, Institute of international economics, China Agricultural University:

The US $200 billion tariff on Chinese exports to the United States increased to 25%, the world total welfare will drop by 0.021%, output will be reduced by 0.123%, manufacturing employment will be reduced by 0.28%, and trade will decline by 0.79%.

However, scholars cautioned that the long-term losses caused by Sino US economic and trade frictions may be far beyond imagination due to the occasional and lagging nature of the data.

"The practical impact of tariff measures is enormous," Zhang Yansheng, chief researcher of the China International Economic Exchange Center, told China news agency that the foreign trade data is lagging behind, and there are various factors behind the data. The real impact can not be fully reflected by the existing charts.

"Now, enterprises can cope with them by digesting themselves and sharing partners with partners. After three months, the negative effects are all coming out."

Chen Wenling, chief economist of China International Economic Exchange Center, also said that trade frictions have spillover effects.

It has posed severe challenges to the rule-based global trading system for many years, undermined the order and rules of peace and development over the past decades, and affected people's expectations for the future.

"Now China and the United States are facing a common choice: whether to bring the world economy to the ditch or to be a responsible big country to restore rationality and to the future of human society."

Zhang Yansheng said.

China has made it clear that Sino US relations are very important, and economic and trade relations are the "ballast stone" and "thruster" of Sino US relations, which not only involve bilateral relations, but also involve world peace and prosperity. Cooperation is the only right choice for both sides.

What should China do in the face of the US's pressing efforts?

"Every time the economy has been beaten down in history, it has its own problems."

Zhang Yansheng said that as long as we stick to our own rhythm and do our own things well, "China's economy will not fail."

Wei Jianguo, vice-chairman of the China International Economic Exchange Center, also believes that China's economy has shown full strength and resilience, and the priority now is to "manage its own affairs well".

China is expected to introduce more initiatives in the future to increase reform and opening up, strengthen intellectual property protection and accelerate the improvement of the business environment.

Liang Ming said that considering that tariffs were added to each other is a "seven injury boxing". When China chooses the counter measures, it can make more targeted adjustments according to the actual situation, and there is no need to keep pace with the pace and amplitude of the United States.

In addition, in order to lighten the burden of enterprises, we should further promote the reduction of taxes and fees and improve the business environment.

Wu Bixuan, senior partner of Haihua Yongtai law firm specializing in anti-dumping complaints, seems to have two kinds of Counteraction: one is "tit for tat" anti sanctions, the other is to take measures to counteract the adverse effects.

China's best countermove is to create a more open and pparent market environment and accelerate growth into a global manufacturing center and innovation center, making China's economy an indispensable engine.

And that's what China is doing.

Last month, China put forward a series of major initiatives for reform and opening up, including continuing to sharply reduce the negative list, promoting the all-round opening up of modern service industry, manufacturing industry and agriculture, further reducing tariff level, eliminating all kinds of non-tariff barriers, eliminating mandatory technology pfer and improving the protection of trade secrets.

With these measures gradually landing, China's attractiveness to global investors can be further improved.

East Asia is also affected.

It will lose nearly half of its growth in two years.

According to Reuters, the tightening of trade between China and the United States on Wednesday will slow economic growth in East Asia this year and next year, but strong domestic demand and growing intra regional trade will also stabilize the region's potential.

AMRO (ASEAN Regional Office) in a report shows that the region's economy grew by 5.3% in 2018, and it is expected to grow by 5.1% in 2019 and 5% in 2020.

It is understood that East Asia includes 10 countries, namely China, South Korea, Japan and Southeast Asia.

"East Asian region will face a great challenge, thanks to the slowdown of Global trade.

The current trade situation is still uncertain, and trade frictions will be further escalated. "

According to the ASEAN Regional Economic Report 2019, it is estimated that China's economic growth rate will slow down this year, with a growth rate of 6.3%, down from 6.6% last year.

The growth rate in 2020 is expected to drop to 6.2% again.

A few days ago, China and the United States are working hard to reach an agreement, which has lost billions of dollars in the world's two largest economies under the influence of Sino US trade.

The US government is pressing for an end to what it considers unfair to Chinese companies, including industrial subsidies, restrictions on foreign companies' entry and suspected theft of intellectual property.

AMRO pointed out that if the United States imposed 25% tariffs on all imports of China, then East Asia would lose nearly half of its growth in two years.

(part of sources: China news network, Hugo net)