US experts on U.S.-China trade tensions: economic differences politicized

Geoffrey Garrett, Dean of the University of Pennsylvania's Wharton School attends the 52nd “Wharton Global Forum” in New York on June 14th. [China Plus/Qian Shanming]

The recent U.S announcement to impose additional duties on Chinese imports has further intensified trade tensions between the two countries, and experts from top US universities say this is largely because the economic differences between the two countries have been politicized.

Our New York correspondent Qian Shanming brings more details.

Last Friday, the United States announced additional tariffs of 25 percent on Chinese imports worth approximately 50 billion U.S. dollars.

Prior to that, Geoffrey Garrett, Dean of the University of Pennsylvania's Wharton School, a top U.S. business school, said the economic differences between U.S. and China have become more political.

"It's unfortunate that the politics of economic policy still tends to think in this very old mindset – export we win; import we lose. Trade imbalance must mean things unfair. You know, that makes no sense in a global economy of global distribution networks, global supply chains. We know that. When you politicize difference, you tend to focus on frictions, you focus on win-lose, not on win-win."

The remarks were made during the 2018 Wharton Global Forum in New York.

Garrett said that China has its own economic development strategy, and he strongly suggests that the U.S. policy makers not interfere with China's own development path, but try to figure out the part that is also in the interest of the U.S. The dean said pushing up barriers on trade, investment, and market access would never be a good choice.

Mauro Guillen, Director of the Lauder Institute of Management and International Studies, Penn Wharton School, took a shaper view saying that this would be the last time that the US could use protectionism as a leverage in global trade negotiations.

"I think President Trump will be the last US president that will be able to use protectionism as a weapon, in five years from now, in ten years from now, the US market is going to be smaller than it is today relative to the rest of the world. This whole thing about protectionism, I strongly believe that it is short-sighted, and that it doesn't make sense."

Guillen said as China is on the way to become the world's largest consumer market, and everything in the global economy, including the U.S. economy, would revolve around this new trend.

Talking about the evolving trade relations between the U.S. and China, Dean Garratt said that even though China and US are very different economies, they have leveraged the economic differences very effectively in the past 40 years. Looking into the future, he says both sides need to stick to win-win cooperation.

"The US and China have leveraged their differences very effectively economically in the past forty years, first by outsourcing manufacturing to China at a lower cost, and most recently by the rise of the Chinese market and the incredible impact that's had on firms such as General Motors and Apple. What do you have in common? They have in common that China is their biggest growing market. So in the past forty years, difference really has been a source of economic strength for both sides, it's been a win-win. Let's focus on the win-wins, we got to get to the win-wins, they are not easy, but if we focus on the win-wins, I think that's the best thing, that's a win-win-win, it's not only a win for both countries, it's a win for the world. "

For CRI, this is Qian Shanming reporting from New York.