Bloomberg reports comments from Stephen Olson, a former US government trade negotiator and Hong Kong-based Research Fellow at the Hinrich Foundation Ltd, citing that both the US and China need to figure out a new trade structure to co-exist.
Additional Comments:
“As of today, we are not in a trade war, but I think the danger is certainly escalating.
The application of the steel and aluminum tariffs to the European Union and Canada and Mexico is certainly a very significant escalation and we are certain that those trading partners will retaliate. At that point, the question becomes will the U.S. administration retaliate against that retaliation.”
“As the size and sophistication of China’s economy grows, its state-directed model of capitalism is increasingly coming into conflict with the traditional Western model of free markets, free trade and a hands-off government approach to the marketplace, and what we are seeing now is that the rules of global trade are not really capable to help these two competing for economic systems to get along.”
“Given the experience, we had with the Doha round, I am not terribly optimistic that this is something that can be addressed within the context of the WTO. It might be more realistic for the U.S. and China to try to work out some kind of a modus operandi, some kind of framework that would let these two countries to continue their trade and investment partnership because after all this has been a trade and investment relationship that has been very mutually beneficial. Now is the time really for the U.S. and China to figure out how can these two systems co-exist with each other because it is clear both are here to stay.”
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