The United States and China must “find a way to get back on track,” a former US official said, urging a cautious, rational approach to trade in a challenging period for bilateral relations at large.
Speaking at a panel during the US-China Hong Kong Forum on Friday, the 12th United States Trade Representative Charlene Barshefsky – who worked under former US president Bill Clinton – noted “different flash points have emerged” on what has become a more “populist, nationalist” track for both countries.
“China has moved towards self-sufficiency [and] elevated the role of national security above economic policy,” said Barshefsky, also chair of the National Committee on US-China Relations.
Initially, she said, “the US embarked on programmes to understand these changes and work with China”, but eventually opted for a trade war she called “entirely unproductive” and a “failure” for the US economy.
She attributed the more nationalist turn in the US to, among other things, the state of relative normalcy it had achieved 10 years after the 2008 financial crisis.
The re-election of Donald Trump as US president – who campaigned on applying at least 60 per cent tariffs to all Chinese goods – has sparked concerns over the effects his second term will have on the global economy.
Stephen Roach, senior fellow with the Tsai Centre at Yale Law School, said at a separate panel at the forum Trump’s likely tariff increases would “trigger retaliatory responses by all of the trading partners” – not just China, but the rest of the world.