Expert: U.S. is damaging itself for putting tariffs on China
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Removing additional tariffs on Chinese goods will significantly ease the pressure on companies in both China and the United States, and help the world to curb inflation, experts said on Wednesday (May 4).
Their remarks followed the Office of the United States Trade Representative, or USTR, announcement on Tuesday of the commencement of the statutory four-year review of the continuation of the US "Section 301" tariffs on Chinese products.
In the four-year review, the USTR will examine the tariff actions on Chinese-origin products from July 6, 2018 to Aug 23, 2018.
Based on this review, the US government can determine whether to maintain the tariffs, change the tariff rates, or remove the tariffs.
In the first quarter of this year, China-US trade grew 12 percent year-on-year to $185.92 billion, data from China's General Administration of Customs showed.
According to Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, the additional US tariffs on Chinese products have put heavy burdens on US companies and aggravated inflation levels in the country.
In the US, many businesses involved in trade have been seeking rollback of the additional tariffs on Chinese products.
Besides, many of the tariffs were levied through administrative orders rather than being based on relevant laws. This led to a series of complaints and lawsuits that challenged the authority of those orders issued by the former administration, he said.
In the two-step review process, the first step is for the USTR to offer an opportunity for US domestic industries that benefited from the tariffs to request their continuation. Legally, the tariffs are to terminate four years after their application, if no US party submits a request that they be continued.
If there are requests to continue, the tariffs are received, under the statute the following step requires the USTR to undertake a review of the effectiveness of the "Section 301" tariffs on achieving their objectives and their impact on the US economy and consumers.
Cancelling the additional tariffs on Chinese products will also help many parts of the world to curb inflation, because stable product and commodity supplies from China and the US – the world's two largest economies – will facilitate the world to build strong industrial and supply chains, said Zhang Yongjun, deputy chief economist with the China Center for International Economic Exchanges.
As the US dollar is a global currency, the increase in its supply, which far outpaced that of other global currencies like the euro, directly pushed up prices in the US, besides fueling inflation worldwide, which has been exacerbated by the Russia-Ukraine conflict, he noted.
Amid global inflation and growing pressures on the global supply chain, tariffs have become an inconvenient factor that inhibits enterprises from conducting international trade cooperation, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
China and the US, he said, should not only remove additional tariffs imposed during their trade disputes, but even further reduce tariffs to make them even lower than the pre-dispute levels. That will significantly boost expectations on normal global supply chain operations, bolster market confidence and facilitate global economic recovery.
"As the world's two largest economies, healthy bilateral relations between China and the US are important not only to them but the world, as the global economy has been facing a number of uncertainties in recent years," he said.
Woody Guo, president for China unit at Herbalife Nutrition, a US-based manufacturer of nutrition products, said it is beneficial for China and the US to enhance their ties in the area of trade and economic cooperation.
"In China, consumption upgrade and domestic demand expansion will help the country to grow its consumer base under the dual-circulation development paradigm, providing huge growth potential for foreign enterprises, including Herbalife Nutrition," Guo said.
Easing restrictions: The US and Chinese flags outside a hotel in Beijing. American tariffs on hundreds of billions of dollars of Chinese imports are due to expire in July, but could be extended if enough industries ask for an extension. — AFP
WASHINGTON: The United States government should eliminate or at least reduce additional tariffs on Chinese imports imposed during the Trump administration, a US trade expert says, arguing that such trade liberalisation measures will help lower elevated inflation and stabilise inflation expectations.
“Here, we’re running a red hot economy. So anything you can do to reduce that cycle is good news,” Gary Hufbauer, non-resident senior fellow at the Peterson Institute for International Economics (PIIE), told Xinhua in a recent phone interview.
In a research published on PIIE’s website, Hufbauer and his colleagues Megan Hogan and Yilin Wang argued that “a feasible trade liberalisation package” could deliver a one-time reduction in consumer price index (CPI) inflation of around 1.3 percentage points. That would save US$797 (RM3,467) for every US household.
He said the direct effect of eliminating additional tariffs on Chinese products would be a 0.3 percentage point reduction in the CPI, but there would also be indirect effect, which will add “substantially” to the 0.3 percentage point.
“It would be a pretty big signal to US firms that they are going to face more competition and that might cause them to moderate their price increases as inflation rolls forward,” said the long time trade expert.
“We’re in a world now where inflation expectations are really quite high,” Hufbauer said, noting that US Federal Reserve’s (Fed) interest rate hikes would have some effect on inflation expectations, and trade liberalisation measures “would have an additional effect.”
Stabilising inflation expectations is important, he said, because when expectations are that inflation is going to continue, “that then feeds into wage demands and that then keeps the cycle going.”
According to the latest data from the US Labour Department, the CPI in March surged 8.5% from a year earlier, the largest 12-month increase since the period ending December 1981. That followed a 7.9% year-on-year gain in February.
US personal consumption expenditures price indexes, the Fed’s preferred inflation measure, soared by 6.6% in March over the past year, the Commerce Department reported on Friday.
In reaction to the argument that reducing the China tariffs would not lead to a meaningful reduction in prices, Hufbauer said it doesn’t completely eliminate the inflation problem, “but it’s better than doing nothing.”
“So there’s raising interest rates, there’s cutting back federal spending, there’s reducing tariffs, all of those things have some impact,” he said. “I would say it’s something where every little bit counts.”
Regarding the current political environment, Hufbauer said he thinks it will be difficult for the administration to reduce or eliminate additional tariffs on Chinese imports before the mid-term elections, but he hopes that it will do that.
The trade expert said he is “very encouraged” by a recent statement by Deputy National Security Adviser Daleep Singh, who said the Biden administration could lower tariffs on non-strategic Chinese goods such as bicycles or apparel to help curb inflation.Hufbauer noted that the Biden administration could be reluctant to remove the Trump-era tariffs, because it would have to face criticism for being “soft” on China.
International scenario likely to affect trajectory
“Hopefully we will start to see private investments gaining traction, but this depends very much also on what is going on in the international front, especially in terms of the Russia-ukraine war and global inflation.” Carmelo Ferlito
Despite being on a recovery path, the country’s economic growth trajectory could be affected by uncertainties on the global front.
PMalaysia’s gradual and controlled easing of Covid-19 restrictions as it transitions into edemicity is set to give the country’s economy a much needed boost.
Despite being on the recovery path, economists have however cautioned that Malaysia’ economic growth trajectory could still be affected by uncertainties on the global front.
Malaysia University of Science and Technology professor Geoffrey Williams said the ongoing Russia-ukraine war, China’s lockdowns and likely austerity in the United States and Europe are key factors that could have an impact on Malaysia’s gross domestic product (GDP) growth.
“The expected negative outlook of the international economic scenario will determine the outcome of Malaysia’s second quarter GDP, not Covid-19 and borders reopening, which we expect to play a marginal role in this phase,” he told Starbiz.
In a base case scenario (which refers to a set of basic assumptions where the results would lead to the most realistic outcome), Williams said Malaysia’s second quarter GDP is forecast to increase 1.3% quarter-on-quarter and 2.6% year-on-year.
“This scenario implies that the GDP will be flat over the first half of 2022. This is in contrast to the consensus view of a rampant recovery with a yearly growth figure close to 5.5% and 6%. In our base scenario, we think that a 3.5% year growth is more likely.”
Malaysia
University of Science and Technology professor Geoffrey Williams said
the ongoing Russia-Ukraine war, China’s lockdowns and likely austerity
in the United States and Europe are key factors that could have an
impact on Malaysia’s gross domestic product (GDP) growth.
In a risk scenario, Williams said he foresees Malaysia’s GDP “going into slightly negative territory”.
“In our base scenario, we expect to see a systematic and progressive recovery, consistent with the potential rate of growth of the economy only in the second half of 2022.
“The contribution of the external demand is expected to be close to zero, reflecting the international cyclical weakness we are already observing in the US, European Union and China,” he said.
Malaysia, which has been gradually easing its Covid-19-related standard operating procedures since late last year, finally reopened its borders to international travellers from April 1.
Last week, Health Minister Khairy Jamaluddin announced a slew of relaxations to Malaysia’s Covid-19 restrictions.
Centre for Market Education chief executive officer Carmelo Ferlito said the relaxation measures announced recently would be a good incentive for the tourism industry.
However, he said the impact of the relaxations would likely be better reflected in the third quarter of this year, rather than in the current (second) quarter.
“We can still expect a good momentum for export, pulled by a weaker currency (which is temporarily good for export but harmful for the economy in general).
“Hopefully we will start to see private investments gaining traction, but this depends very much also on what is going on in the international front, especially in terms of the Russiaukraine war and global inflation.”
Malaysia’s GDP expanded 3.1% in 2021, after posting a 3.6% year-on-year growth in the fourth quarter of last year.
In a base case scenario, HELP University economist Dr Paolo Casadio said Malaysia’s first quarter 2022 GDP is projected to shrink 1.5% quarter-on-quarter and contract 0.7% year-on-year.
Centre
for Market Education chief executive officer Carmelo Ferlito said the
relaxation measures announced recently would be a good incentive for the
tourism industry.
“This would be due to contraction in investments, negative net external demand and stagnation in private consumption.
“We do not see a clear pattern in private consumption and investments, which would be consistent with a positive transition of the economy toward a systematic and sustained recovery.”
Casadio added that the current phase of recovery is “a delicate transition”.
“There are plenty of weaknesses and risks of a new recessionary phase, although the risk of a recession is only around 25%. Disposable income and wealth among households are not recovering due to weak real wages growth, slow increase in employment and continuing withdrawals from the Employees’ Provident Fund to finance current expenditure, even among the middle-income population.”
Ferlito, meanwhile, said he was “not a big fan of GDP forecasts” when asked about his projections for Malaysia’s economic performance for the first quarter of 2022.
“It’s because they fail to ignore how an eventual growth or decline is built. For example, GDP grew in 2021 by 3.1%, but that growth was mainly driven by government spending and private consumption.
“This means that growth is resting on very unstable pillars, being basically financed by household and government debt and inflation.”
Ferlito emphasised that private investments remained “quite stagnant” in 2021.
“The key drivers of a sustainable growth path are savings, which are not measured by GDP and private investments. “I think that beyond the GDP figure, which in itself is pretty useless, we should look at the microfoundations behind it. We will be on the right path if private investments grow, while a closer look should also be devoted to the savings dynamics, which is not captured by the GDP.”Ferlito noted that Bank Negara foresees a good rebound in private investments for 2022.
“This is what we need to hope for, although I believe that a lot of elements of uncertainty are still weighing on that, in particular for the first quarter of 2022.”
Ferlito said the political situation in Malaysia could also have an impact on the country’s GDP performance.
“Hopefully we will have elections with the emergence of a strong majority supported by a reformist agenda. Then there is the big issue of China, which in 2021 accounted for 15.5% of Malaysian exports. China is Malaysia’s first trade partner and therefore their utopic approach to Covid-19 will surely have an impact on our economy.”
Ferlito added that geopolitical uncertainties in Europe could also have an impact on Malaysia’s economic performance.
“Europe accounts for around 7% of the international trade of Malaysia, both in terms of import and export. Troubles there will lead to repercussions here.”
Williams said the focus at the moment should be on price stability and maintaining expansionary credit conditions.
“The government has managed the containment of inflation well up to now, through the control of petrol and other prices. But it was an error to allow the hike of the electric tariffs for the non-residential users in March. This is adding perhaps 0.5% to the outlook of inflation in a very critical phase.”
Williams said this hike should be reversed to guarantee a low level of inflation, which is necessary to support the purchasing power of salaries.
“This would be possible by redistributing the gains and costs of the increase in oil and gas that the different government-linked companies are experiencing and avoids penalising firms and households.”
Casadio meanwhile said he expects Bank Negara to maintain the current expansionary conditions and not revise the official interest rate of the monetary policy until the second half of 2022.
BEING able to walk again must be the deepest wish of every wheelchair user. The sense of helplessness that comes with being unable to walk is especially felt when they need to go out to attend to business because not every place is wheelchair friendly, and not everyone is kind and helpful.
My wife became a wheelchair user several years ago. To make the situation worse, both of us are already in our sunset years. But in spite of this, we don’t have problems going to places where there are ramps or elevators, such as malls or hospitals. Otherwise, going out would be really challenging.
Recently, my wife was required to go personally to a bank in Pantai Jerjak in Sungai Nibong, Penang, to set up an online account.
Being able to do her banking transactions online is now necessary for her because the bank is no longer serving wheelchair-bound customers waiting in their cars.
As the bank is situated among a row of shophouses, accessing it could be difficult for a wheelchair user. I therefore went a day earlier to survey the area. I noticed that the most difficult part would be for the wheelchair user to get onto a nearly 30cm-high step that leads to the lobby because the bank is on a higher level than the five-foot way.
I explained my problems to a bank employee in charge of walkin customers. She told me not to worry as I could enter through the ATM area where there’s a wheelchair ramp. The shutter wall between the ATM area and bank’s lobby could easily be rolled up, she said.
With this assurance, I brought my wife to the said bank a few days later. It was certainly an uphill task for an elderly man to push someone in a wheelchair across a road and raised sidewalk that was uneven and rough. Thankfully, when we reached the five-foot way in front of the bank, a bank employee came out and led us to the ATM area. The shutter was also rolled up almost simultaneously.
Anyway, my wife couldn’t have her online banking account set up because her thumbprints are not readable. She was told that she needed a letter from the Registration Department to facilitate the process.
As we were about to leave, I requested the bank employee at the entrance to kindly roll up the shutter. We were shocked when she said she did not have the key to do so, and directed us to exit by the main entrance. In dismay, I asked loudly why this employee had no empathy at all for the elderly and a wheelchair user.
Another employee kindly came to our aid and had the shutter rolled up immediately. Before leaving, I told the unkind employee to her face, “The key is always there, but you refused to lift a finger to help!”
Everyone will grow old one day and, more likely than not, suffer from serious health problems.
Hopefully, the bank will continue to reach out to customers who are in dire need of assistance.
Sailors
in the fashion clothing pose in front of the aircraft carrier Shandong for the street style photos. Photo: Courtesy of Glory Made
Editor's note:
China's first white paper published recently on its youth describes its young generation as "confident, aspirant and responsible". According to the document, Chinese youth possess a global vision and stand at the forefront of the times bursting with commitment: pursuing lofty ideals with a firm belief in socialism with Chinese characteristics. Young people are also described in the paper as full of patriotism, displaying the sterling quality of living up to responsibilities and striving to be contributors to the country's development.
Wednesday marks the national Youth Day, which falls on May 4 to honor the patriotic youth movement - the 1919 May Fourth Movement that began 103 years ago. On this special occasion which also marks the 100th anniversary of the founding of the Communist Youth League of China, the Global Times
presents a series of stories about four prominent figures of the young generation, who were nourished in great times with ample opportunities and have been sparing no efforts in promoting Guochao, also known as Chinese trends or "China chic", to the international stage. Looking ahead to the new era, their stories fully showcase that youth is the most active and vital force in society and the hopes of a country and the future of a nation lie in their hands. This is the second part in the series in which we can get to see these young faces, a young designer who is helping popularize China's aircraft carrier culture centering the Shandong vessel.The rest stories are Gen-Z director amazes world with ancient dancing show, pledges to be cultural promoter, and Young Chinese culture promoter presents traditional handicrafts to Oxford Uni and Milan Fashion Week.
It was April 23, the PLA Navy Day in China, and 24-year-old Tang Ziwei was even busier. The designer behind the fashion line of the Shandong, China's first domestically designed and built aircraft carrier, had to catch up for new products to meet the enthusiasm among young people for China's own fast developing naval culture.
"Not only the whole team including me but also thousands of China's navy fans are so excited about the day, when we can cheer for China's navy," the 1998-born Tang told the Global Times. "What's more, I feel even prouder to part of it, being able to contribute to the country's own navy culture with my talent and the understanding of China's culture".
Three years after the Shandong vesselwas launchedin 2017, the Glory Made, the studio that Tang works at, released the first culture products for the ship from baseball cap hats to toy models. "It turned out to be a great success among young public, who show great interest in the Shandong
vessel and our navy," recalled Xie dahuan, who runs the studio. "All sold out. People need to make orders first and wait for weeks before receiving them."
Sailors in the fashion clothing pose in front of the aircraft carrier Shandong for the street style photos. Photo: Courtesy of Glory Made
Passion for PLA Navy
The passion and pride for China's own homemade aircraft carrier influence ordinary people who are willing to get close to it, but also the designers like Tang who make it their own dream to getting more people fall in love with China's own naval culture.
In order to achieve
that goal, the Glory Made released the fashion clothing line in the summer of 2021, which includes T-shirts, jackets, shorts and even the popular flight jackets full of China's own design languages and culture elements.
"You see the logo that we designed, the Chinese characters as well as the pandas graphic designs ... they are unique and represent our young people's cultural confidence," said Tang, who visited the Shandong ship for inspiration only months after joining the studio.
Having been fully prepared to see such a large ship, 300 meters at length and over 20 floors tall, she was still stunned to stand in front of the 75,000-ton sea giant. "It is too spectacular. Words can't even express my feelings that time: pride, excitement, joy and more," she recalled.
Claiming she wasn't a military fan herself, the young girl fell in love with the ship after the trip. "Stepping on the ship and talking with these young people, soldiers, pilots, most at my age, help me make up the mind to introduce to more people with the pride feeling, passion and positive energy that I learned from them and experienced myself," she said. Even her PC's wallpaper is a picture of the Shandong vessel.
Photo: Designer Tang Ziwei
Chinese aesthetic culture
How to make young people be attracted to these cultural products has been something that Tang and her colleagues started to plan from the very beginning. Every detail has been carefully added with China's elements like propitious clouds embroidery on the baseball cap.
To Tang, create things with Guochao or China chic style is the reason why she started. "Staying true to my original heart means that I need to apply these inspirations that our own culture brings and show the cultural confidence that wearing these
products can bring," she said. Tang hopes to spread traditional culture among her peers especially those born after 1995.
As one of them,
Tang knows better than anyone else. "We are growing up during the country's fast developing period and witnessing the strength of China. So we are eager to tell the world about our sincere patriotic feelings and cultural pride."
Clothing is the best carrier of that cultural onfidence. In Tang's designs, the name of the Shandong ship in Chinese characters is embroidered on the front of their most popular flight jacket, bring a feeling of "fancy and high class"; "Serve the People," the Chinese writing of the Communist Party of China's motto is also attached on several styles of T-shirts that both young people and sailors on the Shandong ship love to wear.
A series of street-style photo shoots that the sailors and pilots in these clothes posed in front of the ship has been widely covered by both Chinese media outlets and overseas ones like CNN.
According to Tang, the T-shirts imprinted with the image of a robot panda are also popular with young sailors due to the design which they find cool, half of the lovely beast in the suit of a jet pilot and the other half in the X-rayed mechanical structure while its claws being boosted with jets.
Besides, due to the safety requirement on the ship, these sailors have to wear clothes made of pure cotton in some occasions. "Xinjiang cotton, one of the best in the world has been wildly used on the whole clothing line. It feels soft and comfortable," she added.
From the raw material and designs, Tang and her colleagues are choosing the best of the best of the Shandong cultural products. "Young people like me, who refuse the idea of tangping (lying flat), are working in every area to let the world see the strength of Chinese people, the power of Chinese design and feel the warmth of Chinese culture," Tang said.
Since 1987, China has sent 30 batches of seeds into space and cultivated over 700 space crops. China
is the world's leader in crop diversity and application of space cultivation, creating more than 200 bln yuan ($30.5 billion) in economic
...
PETALING JAYA: Royston Chua has come a long way since buying his first share at Warren Buffet’s Berkshire Hathaway company as a 14-year-old
The US-based Malaysian has turned into a business prodigy, bagging international awards and being featured in famed publications.
He recently bagged Clickfunnel’s Two Comma Club Award for hitting US$1mil (RM4.35mil) in sales on the platform with a marketing agency firm he founded..
Clickfunnel is a website that assists entrepreneurs build sales funnels in order to grow their companies through e-commerce.
“This gives me great confidence to go on and conquer greater heights,” declared the 24-year-old Kuala Lumpur-born entrepreneur.
Chua, who has a penchant for fashion, was also behind a luxury lifestyle brand called Good Purpose Life which highlights sustainability and ethics.
“I love streetwear and luxury, as well as sustainable fashion, but there are few brands that encompass all traits. So I decided to create my own brand that combined all that..
“I started the clothing company as a college student in 2016 when I was intrigued by all things fashion. But I wanted to be an entrepreneur with a mission to do good,” the accounting and finance graduate from University of Melbourne said in an interview..
While studying for the degree, he attended an exchange programme at University of Southern California and summer school at Harvard University in the US where his business know-how flourished.
He spent five years in the US before returning to Malaysia this year for a break and to spend more time with his parents and siblings while preparing for his next business venture.
Chua was listed in American portal New York Weekly 30 under 30 last year, and has featured in US and international news and media such as Forbes, Bloomberg, USA Today and Tatler Asia, among others.He has also been awarded the Marketing Conference 2.0 Outstanding Leadership Award, and Fox News and CBS News affiliated Top 20 Entrepreneurs 2021.
Besides his lifestyle brand company, he also helms an advisory for brands and start-ups to expand their businesses and is also involved in investment management.
Chua, who is known as Royston G. King in the United States, said he owes his success to his parents, particularly businessman dad Datuk Seri Garry Chua for his guidance and support.
“I’m very thankful that my parents did not tie me down to a career of their choice. I was fortunate to have had a good start by pursuing accounting and finance,” he said, adding that this led him to work at some renowned firms which included Bain & Co (top three management consulting firms to McKinsey and Boston Consulting Group).
Chua pledged to always hold firm to the principle of striking a balance between profit, the environmental and the social impact of business./p>
“I would not advise anyone to start a business without first learning about corporate social responsibility
“There are many fashion brands making money but they are a net negative to the world,” added the enterprising entrepreneur, who also runs a charity called the Good Purpose foundation.
As part of his philanthropic effort, he has joined several charitable organisations as either a trustee, board member or committee member and provides strategic advice on digital marketing.
NASA Engineer Florence Tan presented a Maniac Lecture entitled, "From Malaysia to Mars." Florence talked about her journey from Malaysia to NASA Goddard Space Flight Center, where she has been working on planetary mass spectrometers, which is characterized by challenges, frustration, excitement, and rewards
