container ship leaves Qingdao Port, Shandong province. [YU FANGPING/FOR CHINA DAILY]
The United States' new tariff push is likely to backfire by accelerating the de-dollarization trend and potentially prompting sell-offs of US Treasuries by major foreign debt holders, leading economists and currency experts said.
"With the abuse of tariff measures, the US is changing itself from a 'maker and defender' of international rules to a 'destroyer and coercer'," Zhao Zhongxiu, president of the University of International Business and Economics in Beijing, said in an exclusive interview with China Daily.
The US' "reciprocal tariffs", which were announced on Wednesday and include a 10 percent "minimum baseline tariff" and higher rates on certain trading partners, are expected to deal a heavy blow to the multilateral trade system and global commercial practices, while leading to greater economic isolation of the US, Zhao said.
All of this will erode US credibility, further dampen the world's confidence in the dollar and push more countries to settle trade in alternative currencies, said Zhao, a professor of international economics.
Furthermore, some trade partners of the US may see reduced dollar income as exports to the US drop, and they may have to sell US Treasuries to obtain the dollar liquidity needed for international payments, Zhao said.
For China, selling US Treasuries could even be considered a possible countermeasure, if necessary, he added.
As of the end of January, foreign holdings of US Treasury securities stood at $8.53 trillion, with Japan and China being the top two holders at $1.08 trillion and $760.8 billion, respectively, according to the US Department of the Treasury.
The Chinese government will continue to take resolute measures to safeguard its sovereignty, security and development interests, according to a statement released by Xinhua News Agency on Saturday on China's position on opposing US abuse of tariffs.
"We don't make trouble, but we have no fear of trouble," the statement said, adding that the US tariff push is sacrificing the legitimate interests of countries worldwide to serve the US' own hegemonic agenda.
As severe turbulence is set to unfold in global trade, the UIBE president said that China's commitment to fostering a more open, stable market environment and creating more opportunities for mutual benefit will be crucial in avoiding a drastic global economic recession.
Following the US tariff announcement, Stephane Dujarric, spokesman for the secretary-general of the United Nations, expressed concern over the "rise in economic protectionism" and its impact on the global economy.
Guan Tao, global chief economist at investment bank BOCI China, told China Daily that the "reciprocal tariffs" may increase the risk of a deep global recession, drawing parallels to the 1930 Smoot-Hawley Tariff Act, which triggered retaliatory measures, collapsed global trade and deepened the Great Depression.
The recession fears have affected the greenback, as anticipation of US interest rate cuts to counter slower growth weakened the US dollar index, which gauges the greenback's value relative to a basket of currencies, to 102.85 as of Friday's close, down 5.13 percent since the beginning of the year, according to market tracker Wind Info.
In the long run, the US' "reciprocal tariffs" are bound to undermine its own currency's global role, said Guan, who is also former head of the Balance of Payments Department at the State Administration of Foreign Exchange.
"To supply global dollar liquidity, the US must run trade deficits. As Washington seeks to reduce deficits through tariffs, global dollar liquidity will tighten, weakening the dollar's international standing," Guan said.
Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, called for Washington to aim for a world in which prosperity is widely shared, rather than one in which only the US thrives while others remain poor.
Chen Wenling, former chief economist at the China Center for International Economic Exchanges, said that China's vast economic scale will serve as a strong buffer against external pressures, especially as the country prioritizes domestic demand to build a more stable growth model that is less exposed to global trade volatility.
多地景区人气旺 世界同享中国年 龙年旅游消费迎来火爆开局 本报记者 潘福达 多家景区门票售罄约满、多地酒店“一房难求”、出入境旅游均增长明显……春节假期旅游消费火爆，成为拉动居民消费的主力军。根 2024年春节档票房创中国影史新高 中新社北京2月17日电 (记者 高凯)据灯塔专业版数据，截至北京时间2月17日13时50分，2024年春节档总票房达78.44亿元(人民币，下同)，超过2021年春节档(78.43亿元)，打破中国影史春节档票 哈尔滨冰雪大世界日前正式闭园。暂别冬日火爆“出圈”的“尔滨”，东北正迎来全面振兴的春天。从全面振兴的视角研究和探讨“尔滨现象”，具有特殊意义。这是因为，全面振兴的关键在于产业转型发展 加强知识产权法治保障 推动发展新质生产力 国务院新闻办公室22日举行新闻发布会，介绍国家层面知识产权案件上诉审理机制运行有关情况。截至2023年12月31日，最高人民法院知识产权法庭共受理案件18924件，审结15710 “药械同追”试点项目助力医疗产品追溯标准化 近日，全国首个GS1“药械同追”试点项目顺利通过中国物品编码中心的验收。该项目是以国际通用的GS1编码标准为基础建设的“药械同追”平台系统，可同时满足我国药品追 自然资源部：22个省级国土空间规划已获批准实施 中新社北京2月22日电 (记者 庞无忌)中国正加速推进各级国土空间规划编制实施。 中国自然资源部22日透露，截至目前，所有省级和新疆生产建设兵团国土空间规划均已 。本文链接：Abuse of tariff measures likely to backfirehttp://www.sushuapos.com/show-5-52779-0.html
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