Harvard China forum speakers advise against starting trade war

As the trade tension escalates between China and the United States, US experts are calling for negotiations to settle the disputes.

“The two sides need to sit down and have serious talks. We still have time before we are actually in a trade war, “ said Ira Kasoff, former US deputy assistant secretary of commerce, at the annual Harvard College China Forum held in Boston, Massachusetts, on Saturday.

Kasoff said he believes a trade war would have a very negative effect on the two countries’ economies and the global economy as a whole.

He explained that because the Section 301 tariff list formally announced by the US Trade Representative would not take effect until the end of May, there is a period for public comment and discussion.

“And what President (Donald) Trump added yesterday (to impose tariffs on an additional $100 billion in Chinese goods) hasn’t even been formally proposed yet, so there’s some time, at least six weeks, where the two sides can still talk and negotiate,” Kasoff said.

Anthony Saich, a professor of International Affairs at Harvard Kennedy School, who joined the discussion at the forum, said the impact of a trade war has been underestimated.

“It’s such a step back into the Dark Ages. I think it’s going to be much more damaging to the US economy than the impression President Trump gives,” he said.

Trump had spoken of his concern about a large US trade deficit, but Kasoff said tariffs should not be taken as a means to remedy a trade deficit.

“The focus on the trade deficit is misguiding,” said Kasoff.

Saich, who agreed with Kasoff, said “The trade imbalance is a ridiculous set of issues to fight over”. Taking into account all the value added on the goods traded reduces the actual trade deficit, he said. “And the fact is, trade deficits are a normal part of global economy.”

Kasoff called on the US to not focus on the short-term trade deficit “because there are many reasons for that (deficit), including structural reasons on the US side”.

He said he hopes the Chinese side can address some of the concerns from the US regarding China’s longer-term industrial policy — Made in China 2025 — and issues of technology transfer and intellectual property rights violation, which he thinks are legitimate.

“I’m hoping there can be discussions between the two sides to address those issues,” he said.

Saich said the damage will be unparalleled if trade war is triggered.

“If it goes ahead, it’s going to have major ramifications for global trading patterns, which are huge and damaging,” he said, adding “It’s really a situation where no one wins”.

China is no longer a weak developing economy, he said, but a significant, powerful economy that is fulfilling its responsibilities.