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The pros and cons of the Sino-US trade war

The 25 percent tariff on $34 billion worth of Chinese goods levied by the United States will increase procurement costs for US high-tech manufacturers, reduce their gross margins and hamper productivity growth, as well as have a negative influence on US employment.

The trade dispute provoked by US President Donald Trump will impact supply and industry chains, which is the key issue. It also hurts US businesses operating in China. The rising costs will be undertaken by consumers, as it is difficult to pass on or replace those costs. Finally, US consumers will pay the bill.

China's economic development has shifted from heavy reliance on exports and foreign investment to consumption-driven growth, and I predict the negative impact of tariffs on China's GDP growth should be about 0.14 percentage points in 2018. Trade wars, dialogue and negotiation will coexist in the coming days. It is a complex and long-term issue.

Zhang Lianqi, consultant to the Ministry of Finance and a national political advisor.

Trade disputes with the United States will not hamper China's ongoing move to become an advanced manufacturing power with intensified research and development efforts and international cooperation. The US governments' accusation against China is baseless and its "Only America can be great" mindset is unacceptable. Our long-term manufacturing plan will push forward as scheduled.

Zhu Sendi, experts' committee chairman at the China Machinery Industry Federation.

A trade war initiated by unilateralism will seriously affect the confidence of all parties in the commitment made by the United States, and weaken the credibility of the US in the global economic governance system. The imposition of tariffs by the US not only undermines the ability of enterprises to allocate resources across borders in accordance with market economic principles, but also has a greater impact on the balance of supply and demand. Producers, consumers and employees from the US will all be deeply affected. Besides, given that the adjustment of monetary and taxation policies has led to the increase of global capital flow to the US, market inflation pressure will probably rise, asset bubbles may increase, and the gap between the rich and the poor in US society may be wider.

Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation.

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