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Winning a trade war is not so easy, Mr President: China Daily editorial

chinadaily.com.cn | Updated: 2018-06-26 20:36

By using tariffs to force US companies to import less and targeting Chinese investment in high-tech industries in the United States, US President Donald Trump is implementing a simple plan to blunt the competition from China and help create jobs in the US.

But it is a strategy that is disrupting the supply chains that are the foundation of the global economy, which include those of the US.

By targeting the supply chains of the US' high-tech manufacturers and restricting Chinese investments in US high-tech, the Trump administration aims to disrupt Beijing's own plan to move China's manufacturing up the value chain, and create jobs in the US that it hopes will translate into votes.

But in doing so its trade shots are being felt far and wide, not least by itself.

While tariffs can be easily and quickly scrapped, the supply chain effects of Trump’s protectionism will not be so easily undone, as its policies are influencing investment decisions that require long-term outlooks. And these decisions, even if by US companies, will not necessarily be in the US' favor.

US motorcycle maker Harley-Davidson, for instance, is voting with its feet against the administration's stance on trade. Having already announced plans to close a factory in Missouri and build one in Thailand, after Trump pulled the US out of the Trans-Pacific Partnership — which would have lowered barriers to key markets in the Asia-Pacific — the iconic US company has now announced its plans to move more of its production out of the US, this time to Europe, citing the increased burden Trump’s tariffs have imposed on it.

The decision by a manufacturer synonymous with Made in America shows that the administration’s policies are backfiring.

And predictably, Harley-Davidson, whose stock price tumbled this week, and its US workers will not be the only victims if the Trump administration persists with its current stance.

If the Trump administration continues to resort to coercion to try and achieve its political objectives, it will face more reciprocal measures from its trade partners, which means even more US industries and workers will feel the pain of its policies.

While time may heal the damage done by the administration's reveling in ideological willfulness, it would be better for all if it came to its senses and realized there will be no winners in the trade war it is waging.

  
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