China-US trade war can still be avoided

China announced new tariffs on 128 products imported from the United States on Monday in response to the new US tariffs on steel and aluminum that took effect a week ago. Although China is determined to counter the US' trade protectionist move to impose up to $60 billion in tariffs on Chinese products, it still hopes to resolve the trade conflict through talks. It means a trade war between the US and China can still be avoided if Washington comes to the negotiating table.

The opposition to the high tariffs on Capitol Hill, especially by Republican congressmen and many big US companies, such as Apple, is very strong. In a letter to Trump on March 18, a coalition of more than 40 enterprises, including Amazon, Google, Facebook and Microsoft, said the US administration should not impose high tariffs or take other measures that will harm US companies, workers, farmers, ranchers, consumers and investors.

Tariffs that result in reduced consumption will also depress financial markets - a decline in the purchase of information and communications technology products alone could result in a potential decrease of GDP, by $11 billion for every percentage point of stock value lost, which would have not only a short-term effect, but also a mid- and long-term economic effect. US President Donald Trump cannot ignore this strong tide of domestic opinion also because his trade measures could end the US' economic recovery. In particular, when Trump realizes his actions will cost the US economy dear, he is sure to think twice.