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Washington's disruptive trade practice knows no bounds

By Chen Weihua | China Daily | Updated: 2019-12-07 09:00

The punitive tariffs announced by the United States against imports from Brazil, Argentina and France on Monday are nothing but the latest display of its unilateral, protectionist and bullying trade policy and practice.

US President Donald Trump tweeted on Monday morning that he would slap tariffs on steel and aluminum from Brazil and Argentina because the two countries "have been presiding over a massive devaluation of their currencies". The two largest South American economies had been exempted from US tariffs last year.

Just like the US' false accusation in August that China manipulates its currency, its allegation against Brazil and Argentina has not been supported by facts. The two currencies have been depreciating due to the poor economic performance of the two countries. In fact, both governments have tried to prop up their currencies.

By imposing punitive tariffs on Brazil and Argentina, the US will inflict more damage on the two economies and thus weaken their currencies further. Wonder what Brazilian President Jair Bolsonaro must be feeling; after all, he is widely regarded as a "friend" of the US president.

As for Argentine president-elect Alberto Fernandez, the timing of the tariffs could not have been worse, as he takes office on Tuesday amid serious economic challenges.

However, many believe the US tariffs are less to do with currency devaluation and more to do with Brazil and Argentina boosting their soybean exports to China at a time when US soybean exports to China have dropped drastically owing to the Washington-triggered trade war.

How can the US blame other countries for the trade disruption that its own reckless policy has caused?

If, like China, Brazil and Argentina also had a surplus with the US in trade, the White House might have accused them, too, of taking billions of dollars out of the US and once again revealed its ignorance about international trade.

The US Trade Representative Office also announced punitive tariffs of up to 100 percent on French products such as wine and cheese in retaliation to France levying "digital service tax" on certain US products, which has affected American technology giants such as Google and Facebook.

While these tariffs, to be imposed under the outdated Section 301 of the US Trade Act of 1974, won't be implemented until the end of public hearings on Jan 31, it is a dramatic escalation of the tariff war between the trans-Atlantic allies after the US announced tariffs on $7.5 billion worth of European Union goods in October in response to the EU giving subsidies to Airbus.

The EU is a customs union, so a US tariff war against France is a tariff war against the EU. Accordingly, the EU has vowed to fight back.

The US move, as a Chinese saying goes, is to "kill the chicken to scare the monkey", because several other countries including the United Kingdom, Austria, Italy, Spain and Turkey are also considering introducing digital service tax.

The US administration has no patience or appetite for multilateral organizations. And since the Organization for Economic Cooperation and Development has already started negotiations on a global treaty on digital tax, the White House seems determined to go its own way.

The US has done the same with the World Trade Organization by blocking the appointment of new judges to the Appellate Body. As a result, the WTO's dispute settlement mechanism will cease to function on Wednesday.

The latest US tariff war against Argentina, Brazil and France demands that the international community more strongly oppose the US' disruptive trade policy and behavior.

The author is chief of China Daily EU Bureau based in Brussels.

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