“TRADE wars are always bad for everyone, but the markets seem to think it is not going to happen or get worse. The news would indicate disaster, which the markets do not reflect, so I assume something else is going on behind the scenes. Trump is a serious protectionist since he had no clue, as are the people he has now gathered around him. If things do get bad later in the year or next year, I think Trump will bring it back.”

— Jim Rogers, co-founder of Quantum Fund & investment guru

“Open and fair trade is fundamental to the success of Rio Tinto, as almost 90 per cent of our products need to move from one country to another. Thanks to an increasingly integrated global economy, enormous benefits have accrued in terms of economic growth, better jobs, cheaper products and more dynamic societies. Most of the lessons through history show that wealth comes from cooperation not isolation. We all go backward when we close ourselves off from one another. We should not forget the lessons from the past, and we believe common sense will prevail in the end.”

— Jean-Sebastien Jacques, CEO of Rio Tinto Group Plc

“The 25 per cent tariff on $34 billion worth of Chinese goods levied by the United States will increase procurement costs for US high-tech manufacturers, reduce their gross margins and hamper productivity growth, as well as have a negative influence on US employment.

The trade dispute provoked by US President Donald Trump will impact supply and industry chains, which is the key issue. It also hurts US businesses operating in China. The rising costs will be undertaken by consumers, as it is difficult to pass on or replace those costs. Finally, US consumers will pay the bill.

China’s economic development has shifted from heavy reliance on exports and foreign investment to consumption-driven growth, and I predict the negative impact of tariffs on China’s GDP growth should be about 0.14 percentage points in 2018. Trade wars, dialogue and negotiation will coexist in the coming days. It is a complex and long-term issue.”

— Zhu Sendi, experts’ committee chairman at the China Machinery Industry Federation

“Trade disputes with the United States will not hamper China’s ongoing move to become an advanced manufacturing power with intensified research and development efforts and international cooperation. The US governments’ accusation against China is baseless and its “Only America can be great” mindset is unacceptable. Our long-term manufacturing plan will push forward as scheduled.”

— Zhang Lianqi, consultant to the Chinese finance ministry & national political adviser

“A trade war initiated by unilateralism will seriously affect the confidence of all parties in the commitment made by the United States, and weaken the credibility of the US in the global economic governance system. The imposition of tariffs by the US not only undermines the ability of enterprises to allocate resources across borders in accordance with market economic principles, but also has a greater impact on the balance of supply and demand. Producers, consumers and employees from the US will all be deeply affected. Besides, given that the adjustment of monetary and taxation policies has led to the increase of global capital flow to the US, market inflation pressure will probably rise, asset bubbles may increase, and the gap between the rich and the poor in US society may be wider.”

— Zhou Mi, senior research fellow at the Chinese Academy of International Trade and Economic Cooperation

“Immediately after the US imposed 25 per cent tariffs on $34 billion of imports from China, China retaliated in kind. While the impact of these moves will be modest, the big worry is on escalating trade tensions. Indeed, added uncertainty is already dampening business confidence and delaying investment internationally. A statement by China’s Ministry of Commerce strongly criticised the US move and vowed retaliation, but otherwise indicated restraint and continued commitment to reform and globalisation. In our view, such restraint, as part of a strategy to assume global leadership, may limit the global economic damage of a trade war between the US and China.”

— Louis Kuijs, Head of Asia Economics, Oxford Economics

“The metal market has been pressured by the trade war. The trade war impacts the metal market more based on market sentiment rather than fundamentals, such as demand and supply. A higher import tax will increase the costs of downstream consumers, narrowing their margins.”

— Zhu Yi, senior analyst of metals & mining Bloomberg Intelligence

—China Daily

Published in Dawn, July 11th, 2018