A tariff war will harm the US too

By hiking the tariffs on $200 billion of Chinese goods from 10 percent to 25 percent just when it seemed the China-US trade talks would achieve a breakthrough, the United States has not only intensified the trade dispute but also ensured both sides take a knock.

The US administration's "America first" policy, represented by its unilateral and protectionist moves, has harmed both countries' economic interests and proved to be a drag on the global economy, as the recent turmoil in the international capital market shows.

Simulation tests of large general equilibrium models show that both countries' economic indicators would suffer due to the US tariff hike on $200 billion of Chinese goods two weeks ago. For example, China's GDP could decline by 0.657 percent, manufacturing jobs by 1.028 percent, exports by 3.359 percent, and imports by 1.384 percent, while the decrease in the US' GDP would be 0.004 percent, manufacturing jobs 0.652 percent, exports 1.876 percent, and imports 3.883 percent. And global GDP, manufacturing jobs and trade could reduce by 0.123 percent, 0.28 percent and 0.79 percent.