Collateral damage in trade war cannot be estimated: China Daily editorial

Could there be a winner in the current trade war between the United States and China? There could, according to the White House which having initiated the trade war, expects to win it.

As Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government has said, the US leader talks about the trade war as if he would be perfectly satisfied if the supposedly punitive tariffs became permanent, since China is paying money to the US Treasury.

If it is not a lack of common sense which has enabled the US leader to say this, it must be the shortsightedness of the US administration that has emboldened it to hold such a view.

The White House has already shown how misplaced such confidence is by announcing that it will provide US farmers with $16 billion in subsidies.

And it is not only US farmers, but those US companies which are prohibited by the White House administrative order from selling products to their Chinese customers that will also suffer considerably from the trade frictions.

So too will those US transnational companies whose products are manufactured on the Chinese mainland and then exported to the US and other parts of the world.

Of course, Chinese exporting enterprises will suffer from higher costs because of the tariffs and those Chinese companies which depend on their US counterparts for chips or other necessary parts will certainly have difficulty in maintaining their production. As a result, those countries which import products from China cannot be expected to get what they need from Chinese exporters.

And the trade war will have a huge impact on the global supply chain, which has been established through the division of labor in the past decades. This division of labor has greatly promoted the development of technology and manufacturing industry worldwide, and at the same time increased the interdependency among different companies from different countries.

Interruptions to, or even the breaking of, the global supply chain would be one of the devastating effects of the trade war between the world's two largest economies. The collateral damage from this can hardly be estimated.

That explains why China has long insisted the two countries resolve their differences through talks rather than fighting a trade war against each other.

What is more than ridiculous is that the White House even expected that China would not retaliate. How could that be?

The effect of the trade war will gradually sink in. There will be no winners. China is open to talks, but the US must change its attitude and cancel the tariffs imposed on imports from China. And to reach an agreement, the talks must be held on an equal footing.