Valentin Schmid, Business Editor at The Epoch Times talks U.S China Trade Dispute | Whose Trade War Is It Anyway? #BoldTV
Posted by BoldTV on Monday, August 6, 2018
Valentin Schmid’s article
Valentin Schmid wrote an article for The Epoch Times on why President Trump is not completely to blame for escalating the trade war between the United States and China. Schmid told Bold Business that “the media likes to paint [the trade war dispute] in a very narrow fashion.” Schmid asked us to imagine an ideal world without tariffs — a trading system that is less about conning and is more personal. This is not a world that we live in. We live in a world where “trade is managed by governments.”
Schmid said President Donald Trump is not starting this; he is only reacting to “one big thing that started 17 years ago: The Chinese ascension to the World Trade Organization.” Schmid claimed that when China joined the WTO, the Chinese wanted 10 percent tariffs while the United States asked for 3.5 percent tariffs.
The thought behind these tariffs
The idea behind these tariffs at the time of China’s ascension to the WTO was that they were underdeveloped as a nation, and the United States allowed them to have higher tariffs to give them a fighting edge for their country and to help them develop. But because certain circumstances have altered, China is now the world’s second-largest economy, the higher tariffs are less appropriate.
“Now, not only do they have this generous WTO allowance, but they also use illicit means to have the dominant position in all the future industries by 2025 … do you say ‘Please lower your tariffs a little bit’ [to a player like that] or do you say ‘Oh, that is not going to happen and if you don’t want to go down we are going to go up,’ and that is what President Trump is doing.”
Is the Trump administration justified?
Bold Business Co-Host David Grasso mentioned that China has been guilty of stealing American entrepreneurs’ intellectual property, and acting recklessly with world trade laws (such as “dumping,” wherein Chinese companies sell products for less than they cost to manufacture with governmental subsidies as help). He asked the question of whether Trump’s actions against China are justified. Schmid said that Trump’s actions are absolutely justified. Schmid said he believes that Trump is just trying to negotiate for tariffs to go down, and that he is not trying to start a trade war at all. He mentions that in Europe, the United States “made a massive threat” and thereby secured Europe’s compromise by completely eliminating tariffs: “So you cannot say that President Trump is advocating for higher tariffs. He’s not. He wants the other guys to come down.”
What does this mean for consumers?
There are going to be winners and losers. Losers will probably be consumers because they are going to have to pay higher prices for products. “That is, if the products do not get substituted and they continue to come from other countries, that might be possible,” Schmid said. Trump will do whatever it takes to make China play fair, and to play by the rules of the international trade game, “which are also not perfect, but they are what they are.”
Schmid concluded by saying that, while things are not perfect, the United States has some of the lowest sets of tariffs in the world. “We practice what we preach,” Grasso said, “and we want others to play by the same set of rules.”
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