Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs."
The latest World Economic Outlook report, released in April by the International Monetary Fund (IMF), lowered the global economic growth forecast for 2018 and 2019 from 3.9 percent down to 3.7 percent. The IMF said that in a highly uncertain political environment, trade risks have become a major challenge for the global economy. This is why IMF Managing Director Christine Lagarde called on world leaders "to join hands to fix the current trade system, not destroy it".
Last week when United States Vice President Mike Pence delivered a speech in Washington D.C. attacking China, he mentioned the tariffs on 250 billion U.S. dollars of goods from China being implemented by the United States. He warned that the United States "will levy even more tariffs, with the possibility of substantially more than doubling that number, unless a fair and reciprocal deal is made", a threat that has also been made by President Donald Trump.
Despite the calls by the IMF for a resolution to damaging political and policy uncertainty and rising trade tensions, Vice President Pence defended the Trump administration’s trade war, saying that “the United States of America has been defending our interests with renewed American strength.” What Vice President Pence calls a defense, and what President Trump has called “the art of the deal”, has been seen by many for what it really is: an attack by the United States against its allies, and against the very foundations of the international multilateral system.
[File photo: IC]
In June, the White House trade representative Peter Navarro said that “There's a special place in hell for anyone who engages in bad faith diplomacy with President Donald J. Trump”. He was speaking about Canada’s Prime Minister Justin Trudeau, who said at a press conference after the closing of the G7 meeting “Canadians did not take it lightly that the United States has moved forward with significant tariffs on our steel and aluminium industry.” President Trump responded by telling the American representative at the G7 to abandon the group’s negotiated joint statement.
The following month, even some of President Trump’s own senior advisers reportedly couldn’t believe what they were seeing when President Trump and European Commission President Jean-Claude Juncker walked into the Rose Garden at the White House and released their joint statement, which was held up as something of a peace deal for their trade frictions. Members of President Trump’s economic team had expected him to announce a 25 percent tariff worth nearly 200 billion dollars on cars imported from the European Union. When this didn’t eventuate, The Guardian newspaper was quick to call into question President Trump's reliability as a deal maker. And as it turns out, his offer of peace really was too good to be true: By the end of the following month, President Trump announced a 25 percent tariff on cars imported from the European Union.
As for Japan, a longtime friend of the United States, it was slapped with President Trump’s steel and aluminum tariffs. And President Trump further threatened to increase the tariff on Japanese cars from 2.5 to 25 percent in order to push Japan to the table to sign several bilateral trade agreements.
As for China, the White House has claimed many times that China has been unwilling to find a way forward to move beyond their current trade dispute. In reality, China has made it clear that it is willing to work with the United States on solutions. In its recent white paper, “The Facts and China's Position on China-U.S. Trade Frictions”, China expressed its willingness to restart negotiations on bilateral investments, and signalled that it is open to working towards a bilateral free trade agreement based on the spirit of equality and mutual benefits.
There is a Chinese saying that "People without credibility won't be able to prosper; A country without credibility will surely decline.” The self-interested protectionism and unilateralism advocated by the Trump administration is jeopardizing America’s credibility as a source of responsible leadership in the world. The world has seen time and again that, since the current American administration took office, it has withdrawn from the international community. To the dismay of its allies, it pulled out of the Trans-Pacific Partnership Agreement, the Paris Agreement on Climate Change, and the Iran nuclear deal. And it has withdrawn from international organizations including UNESCO and the United Nations Human Rights Council – it has even threatened to withdraw from the World Trade Organization and the United Nations. Is this really the "American leadership [that] lights the way" that Vice President Pence was telling the world about?
If a country constantly loses its credibility, how can it expect other countries to trust it? As the United States turns on its allies and foes alike, proclaiming its adherence to the philosophy of “America First”, how can it expect to be a country that helps to light the way for the world?