How can a prolonged and intensified confrontation between the United States and China be averted? To stop the expansion of sanctions and retaliation, both countries must sincerely explore ways to come up with compromises.
The U.S. government has announced a plan to impose sanctions tariffs on almost all imports from China. Levies of up to 25% will be imposed on $300 billion (about 33 trillion yen) worth of products that had not been the targets of previous sanctions.
China too has announced it will start retaliatory measures from June in response to a previous U.S. decision last week to raise tariffs.
If the United States and China impose high tariffs against each other, it will strike serious blows to both countries’ economic activities. It will cause market unrest and deterioration of corporate psychology, raising risks that the global economy will move drastically downward.
U.S. President Donald Trump intends to meet with his Chinese counterpart Xi Jinping on the sidelines of the summit talks of Group of 20 major economies in late June. Both governments must vigorously persist in working-level talks to create environments for the two leaders to make compromises.
It is a matter of concern that the disputes could be unnecessarily protracted.
Behind Trump’s recent tougher stance against China is the fact that his stern attitude leads to an increase in the administration’s approval rate.
It is troubling to think that there might be a calculation at work to allow the confrontation to continue until closer to next autumn’s U.S. presidential election.
Items targeted in sanctions include many products linked to people’s everyday lives, such as smartphones and clothing. If the prices of goods go up on the effects of additional tariffs, U.S. consumers will be dealt a big blow.
Trump’s hard line against China enjoys support now, but price increases may cause a strong voter backlash.
The withdrawal of additional sanctions may be a good policy for the Trump administration. It is important to listen to voices of companies and consumers at hearings and other occasions.
Expanded sanctions may slow the growth of the Chinese economy again. China must use all its ingenuity to find ways to reach compromise with the United States on such issues as provision of subsidies to state-owned companies.
Intensification of the U.S.-China row is a source of concern that Japan cannot afford to overlook. If the economies of both countries slow down, Japan’s economy would possibly cool down as well.
Japanese companies that have production bases in China and export their products to the United States will especially fall into a predicament. Such companies will be forced to drastically reconsider their strategies on such points as investments in China and how their supply chains should be.
At the Japan-U.S. summit talks to be held late this month and at the G20 talks that Japan will host, Japan needs to urge the United States and China to exercise self-restraint so the two sides will not come to an all-out confrontation. It is indispensable for Japan to fulfill its heavy responsibilities as a bridge to connect the two countries.