ZCZC
BCN-37
US-CHINA-TRADE
Trade friction to hamper U.S., world economy: U.S. trade expert
HOUSTON, Sept. 29, 2018 (BSS/Xinhua) – The trade friction between China
and the United States will negatively affect the U.S. economy by offsetting
tax cut benefits and causing higher consumer prices, a trade expert told
Xinhua on Friday.
William Reinsch, the school chair in international business at the Center
for Strategic and International Studies, said that the U.S. economy is
benefiting right now from the tax cuts since the end of last year. But the
fast growth will be offset by trade declines and higher consumer prices which
will eventually change the momentum of economic growth.
“Most economists predict that the tax cut effect will begin to decline as
well after a year or so and ultimately I think it will be a disaster because
we have to pay for it eventually,” said Reinsch.
He also predicted that the impact of trade tension on American consumers
will take some time to show up, adding “the significant impact is not likely
to occur until the first or the second quarter next year.”
Talking about the impact on global economy, Reinsch said the trade
friction will lower the global economic growth rate and at the same time have
a spillover effect on protectionism.
“If one country breaks the rules, particularly a big one, and gets away
with it, it becomes easier for others to do the same,” Reinsch said.
The United States has announced its decision to impose additional 10
percent tariffs on 200 billion U.S. dollars worth of Chinese products from
Sept. 24, saying that it will take other escalating tariff measures.
In response, China announced it will levy additional tariffs on U.S.
products worth 60 billion dollars starting from Sept. 24.
BSS/XINHUA/HR/1345