Time for a defenseThe cannons have been positioned, loaded and fired off — a full-blown trade war has begun between the world’s two largest economies.
The Donald Trump administration from midnight Friday started to impose a 25 percent tariff on 818 items from China worth $34 billion. Beijing immediately slapped the same levy on an equal amount of American imports. It warned that it will take more actions against the United States, which it accused of starting “the biggest trade war in economic history.”
As earlier warned, Washington will follow up with additional steep duties on $16 billion worth of Chinese imports within the next two weeks. It threatened to go further and impose tariffs on a maximum of $500 billion worth of exports if Beijing does not back down.
Given China’s exports of goods were worth $429.8 billion, Washington is out to sabotage the entire volume of made-in-China products. The offensive mainly wants to destabilize Beijing’s ambitious Made-in-China 2025 initiative to make the industrial powerhouse become a leader in technology and innovation.
The U.S. accuses China of industrial theft and exploitation and is determined to keep China at bay in the high-tech sector.
With the future leadership in innovation at stake, the two won’t likely yield easily. Korea Inc. inevitably will suffer in the crossfire as its exports to China are mostly intermediary goods and components for products that China ships to the U.S. A 10 percent drop in Chinese exports to the U.S. will reduce Korean exports to China by $28.2 billion a year, according to the Hyundai Research Institute.
Corporate and market anxieties are growing. But the government is oblivious. Trade and industry minister Paik Un-gyu in a trade-related government meeting on Friday predicted the impact on Korean exports would be limited. We hear no comments or actions from deputy prime minister for economy Kim Dong-yeon or the president’s economy-related secretaries. It raises questions of whether there are any government officials who care for exporters and traders in this country.
JoongAng Ilbo, July 9, Page 30