China’s trade policy ‘like competing in an Olympic race wearing lead shoes’

Published March 11, 2018
ZOUPING(China): A worker stands in a steel workshop on Saturday. China on March 9 denounced US tariffs on aluminium and steel imports, saying that they would profoundly harm the international trade environment.—AFP
ZOUPING(China): A worker stands in a steel workshop on Saturday. China on March 9 denounced US tariffs on aluminium and steel imports, saying that they would profoundly harm the international trade environment.—AFP

President Donald Trump has spent the last week railing against trade policies that allegedly put the US companies at a disadvantage.

Though economists, fact-checkers and even members of Trump’s own party have called the president’s international trade analysis into question, inventor and Tesla chief executive Elon Musk appears to agree (in part) with Trump.

Musk, 46, was a member of Trump’s advisory council before stepping down following the president’s decision in June to pull the United States out of the Paris climate agreement.

Amid a series of tweets on Thursday, Musk – apparently frustrated by the Asian nation’s import duties – compared China’s trade policy to “competing in an Olympic race wearing lead shoes.”

Musk made his argument after responding to a Trump tweet demanding that China reduce its trade deficit with the United States.

“Do you think the US & China should have equal & fair rules for cars?,” Musk tweeted. “Meaning, same import duties, ownership constraints & other factors.”

Musk continued to lay out his frustration with the current trade relationship, pointing out a significant disparity in the import duties each country places on the other nation’s cars.

He tweeted, “For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference” and “I am against import duties in general, but the current rules make things very difficult. It’s like competing in an Olympic race wearing lead shoes.”

Musk also noted that, US auto companies in China are barred from owning “even 50% of their own factory,” while there are five “100 percent China-owned EV auto companies in the US”

Musk finished his tweets by pointing out that he’d raised his concerns with the Obama administration, but “nothing happened”.

“Hope this does not seem unreasonable,” he tweeted in conclusion.

Trump did not immediately respond to Musk’s flurry of tweets.

Talk of tariffs on aluminum and steel has captivated conversation in the nation’s capital ever since Trump tweeted that “trade wars are good, and easy to win” earlier this month. The president said he would introduce tariffs of 25 per cent on imported steel and 10pc on aluminum, figures that sent minor shock-waves through the stock market.

Though automakers like General Motors say the vast majority of the steel they use is domestic in origin, experts warn that tariffs will increase the price of steel and auto parts, as well as the price of cars.

On Thursday, Trump said he intended to impose tariffs on imported steel and aluminum, but may exempt imports from Canada. The ultimate decision, he said, will hinge upon negotiations with the North American Free Trade Agreement.

Bloomberg/The Washington Post Service

Published in Dawn, March 11th, 2018

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Counterterrorism plan
Updated 23 Nov, 2024

Counterterrorism plan

Lacunae in our counterterrorism efforts need to be plugged quickly.
Bullish stock market
23 Nov, 2024

Bullish stock market

NORMALLY, stock markets rise gradually. In recent months, however, Pakistan’s stock market has soared to one ...
Political misstep
23 Nov, 2024

Political misstep

FORMER first lady Bushra Bibi’s video address to PTI followers has triggered a firestorm. Her assertion implying...
Kurram atrocity
Updated 22 Nov, 2024

Kurram atrocity

It would be a monumental mistake for the state to continue ignoring the violence in Kurram.
Persistent grip
22 Nov, 2024

Persistent grip

An audit of polio funds at federal and provincial levels is sorely needed, with obstacles hindering eradication efforts targeted.
Green transport
22 Nov, 2024

Green transport

THE government has taken a commendable step by announcing a New Energy Vehicle policy aiming to ensure that by 2030,...