Punitive tariffs won't solve trade disputes

Updated: 2012-10-19 15:12


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BEIJING -- The United States should seek candid dialogue and fair negotiations, rather than imposing punitive tariffs, to settle trade frictions with China amid a weak global economy.

It is a plain truth, but Washington apparently opted to ignore it once again.

On Thursday, the US government launched anti-dumping duty and countervailing duty investigations into hardwood and decorative plywood imported from China, on the grounds that the products were "sold at less than fair value in US market."

Related reading: US starts probe on Chinese hardwood, plywood imports

Indeed, it was not the first time this month that Washington took a hardline against Beijing regarding bilateral trade disputes, especially when the November 6 presidential election is just around the corner and both presidential candidates were using China as a punching bag.

Since the start of the election year, the Obama administration has launched four anti-dumping duty and three countervailing duty investigations into imports of Chinese products, including stainless steel sinks, xanthan gum and wind towers.

Evidently, the latest surge of US trade protectionism against China has much to do with the election politics, and it is also closely linked to the country's sluggish economic recovery.

However, the US government should avoid rushing to punitive tariffs on Chinese products, as such actions would undoubtedly hurt increasingly closer US-China trade relations, which are crucial to the global economic recovery, and lead to a trade war that would benefit neither side.

Moreover, the recent protectionist moves by the US government would not only harm Chinese exports, but also victimize the US economy as US companies would have to burden higher costs in a slack economy.

Undoubtedly, with rapid expansion of US-China trade, frictions are inevitable. But seeking a solution by resorting to trade protectionism and slapping tariffs would bring nothing but a Pyrrhic victory, which will finally undermine the win-win cooperation between the world's two largest economies.

Therefore, both the United States and China should work together with a rational attitude to settle trade conflicts through candid dialogue and fair negotiations, uphold the principle of free trade and prevent the disputes from further escalating into retaliatory trade wars.

As US International Trade Commission is scheduled to make its preliminary injury determination on the case on or before Nov 13, 2012, Washington should bear in mind that for its own good, it should honor its commitment of free trade and make a rational decision.