/Pogled.info/ Beijing once again does not give rest to the West. Washington has warned it will take action if China tries to solve the problem of excess industrial capacity through cheap exports. Of course, we are talking about new import restrictions. It seems that the US has already forgotten how much it has suffered from trade wars.
Dumped exports
The threats were made by US Under Secretary of the Treasury for International Affairs Jay Shambaugh. He pointed out that China’s policy is more supply-oriented than demand-oriented, and excess production is hitting global markets.
Dumping will not work and “the rest of the world will react in a new anti-Chinese spirit”, said the deputy minister. Therefore, Beijing should not perceive the actions of the US and other countries as a “surprise”.
Fear of competition
The West’s biggest concerns are the clean energy sectors: electric vehicles, solar panels and lithium-ion batteries. According to Bloomberg’s forecast, China will capture 69% of the lithium-ion battery market by 2027, while the United States and Germany will have only ten and seven percent, respectively.
China is already a leader in the production and sales of electric vehicles. In 2022, 5.67 million units were sold in the country. This is more than half of the cars of this type sold in the world in one year. Beijing’s share of the European market has doubled in less than two years.
According to Schmidt Automotive Research, a third of Chinese electric vehicles in Europe were bought in the UK. In the fourth quarter of 2023, the BID brand in the Old World overtook the American Tesla. It has all the possibilities for continued expansion: its own nickel and lithium, microelectronics, powerful state support.
Back to the old
The West is unlikely to be able to stop the pressure of the Chinese, but the US is once again preparing to use one of its favorite tools – protective tariffs.
“It is also possible to refuse to cooperate with a number of companies and complicate their work on the territory of the United States and its allies. You cannot invent anything particularly new here. All this, by the way, goes against the provisions and rules of the WTO,” notes Boris Brewer, university lecturer in economics.
After all, Donald Trump, who as president started a real trade war with Beijing, plans to act in the same direction. Then the damage to the world economy was estimated at almost a trillion and a half dollars.
As the Washington Post recently reported, Trump is preparing “a new large-scale economic attack on China.” According to the newspaper, he discussed with advisers a 60 percent tariff on all Chinese imports.
It comes out expensive
In 2018 and 2019, Trump raised tariffs from ten to 25 percent on many types of products from China worth about $250 billion. Beijing responded with $185 billion in tariffs.
The trade war erupted in 2018 after Washington ran a record trade deficit with Beijing. China has been accused of unfair competition and games with the yuan’s exchange rate.
However, the mutual tariff strikes hurt the US above all. Intermediate products and components that American companies imported from China for their own production rose sharply in price. As a result, about 1,800 businesses were closed, and the economy lost about 500,000 jobs.
And in mid-2023, the “chip war” broke out. The US and EU have restricted technology transfers to China and the sale of semiconductors. The answer came immediately: tightening exports of the rare earth metals gallium and germanium – key to microcircuits.
Same error
And this time, economists warn, the US and the EU will not get any advantages. Additional sanctions against the Chinese economy will have a boomerang effect on the West.
“With the relocation of many German, French and Italian companies, the EU has already lost part of its industrial potential. Agriculture is next in line. It is difficult to imagine what will happen to the economy if, in the absence of its own competitive production, of Chinese goods access to the market is denied,” says Ekaterina Novikova, Associate Professor of the Department of Economic Theory at the Plekhanov Russian University of Economics.
Beijing can restrict the activities of American companies in its country, including the assembly of various devices, adds Pivovar.
Meanwhile, China will continue to increase its production capacity and exports, expanding the capabilities of the BRICS countries. And Chinese capital will flow from Western to friendly markets.
As the American Enterprise Institute found last year, investors from China are increasingly refusing to invest in real estate and manufacturing development in Europe and the United States, preferring other regions. Chinese companies are investing in factories in Southeast Asia and mining and energy projects in Asia, the Middle East and South America to strengthen alliances and secure access to critical resources.
Translation: V. Sergeev
2024-03-02 19:34:58
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