US has to pay for tariff hikes
By Wu Yuehe, People’s Daily
The US decision makers are accustomed to pressuring other countries by threatening to hike tariffs. Satisfy their demands, or else they will intimidate you with a “big stick” of tariffs. Such hegemonic logic, which has reminded people of the gunboat diplomacy, cannot run well in the 21st century.
Recently, Washington threatened to increase tariffs on Mexican goods if Mexico doesn’t stop the flow of undocumented migrants crossing the border. However, less than two days after the US asserted that it had reached “a very important deal” with Mexico, US Secretary of State Mike Pompeo pushed back, saying that the US could still slap tariffs on Mexico if not enough progress was made on the latter’s commitment to stem illegal immigration.
The US’ law-of-the-jungle mentality has shocked the world again and drawn wide criticism from the international community. Pascal Lamy, a former director-general of the WTO, said the migration deal imposed on Mexico by the US under the threat of punitive tariffs was a victory for “hostage-taking” over international rules, noting that Mexico may run the risk of facing more threats from the US in the future.
The consequences of wrong economic and trade policies are hard to forget. In the late 1920s, the US placed high tariffs on imports under a beggar-thy-neighbor policy, which resulted in nothing but the Great Depression, the global economic crisis and a 66-percent decline of global trade volume between 1929 and 1934. The US should learn from this painful lesson.
The international order established after World War II was originally intended to prevent such tragedy from happening again. However, the current US government is obsessed with the dangerous tariff-raising game, which has become a source of risks in the global market, and worries more and more people.
Some US politicians have become obsessed with the “tariff game” and trampled on the bottom line of international relations again and again.
They regard tariff imposition as a panacea, and even became addicted to it. They believe that “no trade can be made without a tariff,” while completely neglect the chaos and loss that the US has caused for itself, and the pressure and impact the US has brought to the global market.
The global market has gone out of control because of the US government’s abuse of tariffs, and people are beginning to worry about the stability of the multilateral mechanism, which has been growing after World War II, according to Agencia EFE, a Spanish news agency.
The US is shooting at the international labor division and industrial supply chain, which are at the core of global economy, said an article published on German newspaper Der Tagesspiegel.
The tariffs have thrown a giant wrench into Southern California logistics industries, rippling through a broad web of companies that handle shipping, trucking, railroads, warehousing, construction, manufacturing and farming, said a US report, adding that the snafus at the port has become “a nightmare” for locals.
However, the US politicians neither cared about the predicament of the American people, nor listened to any words of dissent. In response to media criticism, they said relevant media outlets are “retrogressive” or “untrustworthy”.
They thought hegemony would “make America great again,” but the reality is not fantasy or wishful thinking. These American politicians, who act against the laws of economics and turn a blind eye to the global development trend, will eventually pay a heavy price for their practices.
