By Yu Dunhai
Recently, the term ‘tariff’ has suddenly become a buzzword, frequently appearing in media headlines.
The new administration of the United States seems convinced that the world is taking advantage of America, and it has gone so far as to wage a ‘tariff war’ against the globe – announcing or threatening to impose varying levels of tariffs on China, Mexico, Canada, the European Union, and others, while also proposing reciprocal tariffs on all nations.
The international community has been left in shock.
On March 7, during a news conference, a member of the Political Bureau of the CPC Central Committee and Foreign Minister, Wang Yi responded to a question on this matter. He said that as the Chinese saying goes, ‘If one’s action fails, look for the reason within oneself.’ The United States should go over what has actually happened. What has it achieved from tariff and trade wars these years? Has its trade deficit widened or narrowed? Has its manufacturing become stronger or weaker? Has the inflation gone up or down? Has the life of its people become better or worse?
The answers to these questions are more than obvious. In accordance with international trade principles, when taxed goods are hard to substitute, the tariff burden largely falls on enterprises and consumers of the importing country.
Data shows that after the U.S. administration imposed additional tariffs on Chinese goods in 2018, U.S. importers and retailers bore more than 90 per cent of the added costs, which were passed on to consumers through higher prices, directly contributing to an increase in inflation levels in the U.S.
The prices of items such as washing machines and steel rose by 9 per cent to 12 per cent due to the tariffs.
John Deere Company, a major U.S. tractor manufacturer, was forced to raise prices due to the increase in raw material costs, further weakening the competitiveness of its products.
In 2024, when the U.S. administration raised the tariff on Chinese electric vehicles to 100 per cent, it may seem like a measure to ‘protect domestic industries,’ but in reality, it deprives U.S. consumers of their right to purchase high-quality products at competitive prices and could potentially raise inflation by 2 to 3 percentage.
History and reality have repeatedly demonstrated that there is no winner in a tariff war and upholding the multilateral trading system is the true path for humanity.
The unilateral imposition of tariffs is a typical act of bullying, and its outcome inevitably harms others without benefiting oneself. In addition to the harms to themselves, imposing tariffs arbitrarily will significantly increase the export pressure on the levied country, disrupt its industrial chain layout, and have long-lasting ramification for its economic growth.
A tariff war not only disrupts the equilibrium of global market competition but also intensifies tensions in global trade.
The world needs rule-based multilateral trading system
In a world of globalisation, all economies are deeply intertwined, forming a community with a shared future. Therefore, only adhering to the principle of win-win cooperation can all nations achieve sustainable development. And this goal cannot be realized without a WTO-centered, rule-based global multilateral trading system.
In a stark contrast, during the Beijing Summit of the Forum on China-Africa Cooperation held last year, Chinese President Xi Jinping solemnly announced that China will voluntarily and unilaterally open its market wider, and has decided to give all the least developed countries having diplomatic relations with China, including 33 countries in Africa, zero-tariff treatment for 100 percent tariff lines. This has made China the first major developing country and major economy to take such a step. It will help turn China’s big market into Africa’s big opportunity.
China will firmly uphold multilateral free trade system and resolutely oppose protectionism, and will work with the international community, including Nigeria, to foster an open, inclusive, and non-discriminatory environment for international cooperation, promote economic globalisation that benefits all, and build a community with a shared future for everybody.
