China-bashing tariffs an exercise in futility

Part of the new additional tariffs recently announced by the United States government on $300 billion worth of Chinese goods took effect on Sunday, with China responding with additional tariffs of its own on some of the US goods on a $75-billion target list.

Despite the expected escalation of the trade friction between the world's two largest economies, 87 percent of US companies operating in China said they will not move out of the country, according to a survey by the US-China Business Council released on Thursday.

That such a high proportion of US companies refuse to fall in line behind the US administration shows that the latter's China-bashing initiatives go against the will and interests of US companies.

According to the USCBC annual member survey, completed in June, 97 of the 100 surveyed companies said that their China operations are profitable.

In the first half of this year, US companies invested $6.8 billion in China, an increase of 1.5 percent over the same period in the previous two years, according to the latest data from Rhodium Group.

It is rational choice for those US companies to enter and stay in China. It is not only the world's second-largest economy with comprehensive industrial chains, but it is also poised to become the world's largest consumer market, measured by retail sales, this year.

And with an annual GDP growth of over 6 percent, continuing opening-up and an ever-improving business environment, the country will continue to be a favorable place for international investment.

The headstrong tariff moves by Washington have started to take their toll on the US economy. Its GDP growth may ease to 2 percent in the second quarter, according to the US Bureau of Economic Analysis. It was 3.1 percent in the first.

And while the US administration has largely avoided imposing tariffs on consumer goods up to now, more than two-thirds of the consumer goods the US imports from China now face higher taxes, which will hit the main driver of the US economy: consumer spending.

As The Associated Press observed, although the US president insists it is China paying the tariffs, studies such as one by J.P. Morgan conclude that it is US businesses and consumers that are bearing the costs.

It is time the US administration reconsidered its poorly thought out China-bashing moves. Working to secure a trade deal would be a more fruitful approach, since cooperation benefits both, while the trade war jeopardizes both their interests.

(China Daily Global 09/02/2019 page11)