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More to trade dispute than tariffs
calendar24-06-2019 | linkThe Star Online | Share This Post:

The Star Online (24/06/2019) - THE Chinese consul general in Penang gave a one-sided and simplistic overview of the current United States-China trade dispute in the letter “Trade relations depend on respect” (The Star, June 21).

He looked at tariffs and blamed the US for enacting them. The US and China are the world’s largest trading entities and rarely can such a huge issue be boiled down to just one factor.

We need to examine why the US enacted tariffs in the first place, as they weren’t done willy-nilly. As a private American citizen, I hope to give a more balanced view of the current dispute.

Historically, the US has done more than any other foreign power to help China lift millions of people out of poverty. This was due to the trade between the two countries from which China has benefited greatly. And the US supported China’s entry into the World Trade Organisation (WTO).

Historically the overall trade balance has greatly been in China’s favour. So how did China become more of a competitor?

Firstly, our alliance was based on the US-Soviet Union conflict. China and the US shared a common enemy. Upon the break-up of the Soviet Union and the Tiananmen Square protests, the US started to view China less as an ally and more as a competitor.

Both countries have diametrically opposed political systems – communism and liberal democracy. These two nations will never be the best of friends as their value systems oppose one another, but perhaps we can at least enjoy a respectable economic relationship.

Unfortunately, this has been difficult as the economic playing field is one-sided. Chinese firms for the most part could compete in the US, whereas many US and European companies are banned in China, such as Facebook, Google, Twitter, Western news outlets and Wikipedia. Hence, I don’t understand why the US is being attacked for depriving a communist country’s 5G mobile company (Huawei) of the US market when China deprives the US and other foreign companies of its market for much more suspect reasons.

To say that the current trading mess is all because of US tariffs is not completely true. The tariffs resulted from years of China’s subsidies for government businesses, forced technology transfers, lack of intellectual copyright protection, and denial of equal market access to US companies.

The tariff issue can be resolved if China becomes more flexible in addressing these historical imbalances. Opening the Chinese market wider would benefit both countries and the world.

Read more at https://www.thestar.com.my/opinion/letters/2019/06/24/more-to-trade-dispute-than-tariffs/#uLl71pzpsQWrHmtq.99