China has been able to absorb the impact of the U.S.-imposed tariffs by staying committed to playing the "long game" while pursuing its own economic goals, a British economist said after the two sides agreed to extend a partial suspension of tariff hikes.
Following their bilateral economic and trade meeting in Stockholm last month, China and the United States on Tuesday released a joint statement saying they had agreed to pause planned tariff hikes for a further 90 days starting Aug. 12.
Despite this temporary respite, Iain Begg, a professor from the London School of Economics and Political Science, stressed how the uncertainty brought by the U.S. tariff policies still risks another "global slowdown," but noted that China's approach means it is able to ride out the immediate disruption as it stays focused on its longer-term goals.
"Uncertainty damages everybody, and that continuing uncertainty emanating from the White House is damaging everybody's trade, everybody's investment decisions, and that will cause a global slowdown again, compared to what would otherwise have happened," he said in in an interview with China Global Television Network (CGTN).
"A country like China is able to absorb this, because China plays a long game. China traditionally has been able to say we're not looking at 2025 or 2026, we're looking at 2035 or 2036. And even if it costs us in the short term, we are not going to be bullied by the White House," he said.
Begg believes that while the broad global consensus is still that the Trump's administration's trade approach remains the wrong path, many countries will still focus on securing the best possible trade deal for themselves.
"I think the sentiment in many other countries is that tariffs remain a bad choice of policy. But if tariffs have to be imposed, then they will reluctantly go along with them, largely to facilitate the continuation of trade deals. I don't see other countries using tariffs in the two ways of imposing political pressure or using [them] as a major revenue raising instrument. Other countries think that's not the way to go," he said.
However, Begg did point to one potential flash point between the U.S. and India, after the U.S. slapped a 50-percent tariff on Indian exports, sparking a public outcry. He believes how India responds could prove to be a major test for Trump's high-pressure tactics.
"One country which I think will be an interesting test case is India. Let's not forget it's the fifth biggest economy in the world, the most populous economy in the world. If Trump goes after India the way he's doing with Brazil and Canada, I think there'll be a major backlash there. And it'll be interesting to see whether India can lead a kind of rearguard action against this attempt to exercise power by America in a way which is just not in the interests of any other country," he said.
China remains resilient amid US tariff disruption by playing "long game": British economist
