(Yicai Global) July 6 -- Representatives from foreign business associations in China have expressed their opposition to US trade protectionism, arguing that it harms the multilateral trading system and fuels turmoil and uncertainty in the world economy.

The US will worsen the situation for all involved, including itself, and global industrial and value chains will feel the burn should its stubborn threats to add tariffs targeting China come about. This was the consensus among international business leaders at a recent forum.

Despite vocal opposition from US and other foreign business communities, the 25 percent additional tariffs imposed by the US administration on Chinese products worth USD34 billion took effect today.

Research by a South Korean agency revealed a possible 20 percent decline in that country's exports to China if US imports drop 10 percent following the additional 25 percent tariff imposed on USD50 billion worth of Chinese goods.

Sam Kim Soo, head of the China unit of Korea's trade and investment agency, bemoaned the China-US trade war at a symposium in Beijing yesterday jointly held by the China Council for the Promotion of International Trade and China Chamber of International Commerce. Representatives from foreign business groups in China attended.

Chaos and Uncertainty 

Lu Pengqi, vice chairman of the CCPIT, said the trade protection measures the US has taken will "seriously disturb the global trade and economic order" and "grievously impair the legitimate rights and interests for the international industry and commerce community." He also warned of the ripple effect and more unilateral or regional actions across the world. "The US action is not conducive to its own economic growth, and increases the chaos and uncertainty in the world economy."

In sharp contrast with the ever more evident trade protectionist tendencies of the US are China's tangible actions to expand opening and reform, improve global governance and push for an open world economy.

A lose-lose situation is inherent in trade protectionism, and the entire world will languish in the doldrums of economic stagnation if all nations pile aboard the bandwagon of error to seek to protect themselves at other countries' expense, said Lu, who called on industry and commerce communities worldwide to consistently voice their support for a multilateral trade mechanism and oppose trade protectionism.

Representatives from a slew of overseas business groups were also present at the symposium, including the European Union Chamber of Commerce in China, Brazilian Trade and Investment Promotion Agency, the Japan-China Economic Association, the Korea International Trade Association, the German Chamber of Commerce in China, the Malaysian Chamber of Commerce and Industry in China, and ProColombia.

The delegates showed varying degrees of concern over the potential impact of the US-triggered trade clash on the economic development of their own countries.

Germany strongly condemns trade protectionism, said Sebastian Fritz, legal consultant with the German Chamber of Commerce in China.

Colombia has signed trade and economic agreements with over 60 countries and is embracing more opportunities to invigorate global value chains, said Natalia Tobon, commercial attache with the Colombian Embassy in China.

US Policy Reversal

The US government had for many years supported dismantling tariff barriers and pushed for free trade before the Trump administration took office in 2016, said Michael House, chief representative at the Beijing office of US-based Perkins Coie LLP.

Since President Donald Trump took office at the beginning of last year, however, the US has undergone significant changes, especially in trade policies, House said. Instead of following previous conventions, the Trump administration has adopted quite aggressive and improper measures. It has reversed long-standing US trade policies. The US government's recent moves violate its obligations under the World Trade Organization and harm the interests of its traditional allies, House's law firm believes.

The US government's current trade policies are not fully endorsed even in the US, House said. The US is hearing dissenting voices now, with these policies also stirring debate even among senior officials.

The country has recently taken a series of trade protectionist measures against iron, steel and aluminum, autos and auto parts, Lu added. By doing so, it imposed additional 25 percent and 10 percent duties on imports of these metals from various countries, and is meantime planning to load 25 percent in extra duties on Chinese products worth USD50 billion.

Tit for Tat

To protect their lawful rights and interests, countries across the globe have taken matching measures. For instance, Canada decided to levy tariffs on CAD16.6 billion (USD12.64 billion) of American products, and the European Union imposed duties on EUR2.8 billion (USD3.28 billion) worth of US imports. India has also slapped duties on various US agricultural products and iron and steel imports worth USD241 million.

The US actions have triggered a domino effect, severely disturbing the world market and threatening the international trading system under the WTO.

The rise of trade protectionism in the US will further intensify the disorder and uncertainty in the global economy and considerably impact countries, especially developing ones, Lu said.

Downward Spiral

America's moves not only hinder the country's own economic growth, but also aggravate the disorder and sow uncertainty in the world's economy.

The global trade conflict is at risk of further deteriorating, UK-based global forecasting and analytics firm Oxford Economics also noted in its latest report. Against the background of simmering tariff conflicts, products caught up in the overall trade war account for 4 percent of global imports -- worth over USD800 billion. Global gross domestic product will drop 0.4 percentage point next year in consequence.

The USD34 billion taxable product list the US has issued includes around USD20 billion -- or 59 percent -- of products manufactured by foreign firms in China, with American ones accounting for a considerable proportion of these, Gao Feng, spokesman of China's commerce ministry said at a press conference yesterday.

It is evident that if the US enacts tariff policies, Chinese firms, foreign companies, and even American businesses will suffer. These tariff measures only damage the global industrial chain and value chain. To put it simply, the US is firing at the entire world -- and itself.

Compared with the US' resort to strong-arm trade protectionism, China's adherence to multilateralism and implementation of the national policy of opening are key measures fortifying global economic confidence.

Though the US has accused China of not opening its markets enough, the world has seen China's achievements in reform and opening in the past several decades, Lu said. China will continue to further this progression in line with its schedule and its own needs.

China's National Development and Reform Commission and Ministry of Commerce have cut items in the latest foreign investment negative list to 48 from 63 and will further promote the policy of openness in 22 fields, he noted.

Tariff Cuts 

China will significantly reduce tariffs on various consumer goods, such as autos and auto parts, clothing and shoes, kitchenware, sports and gymnastic equipment, home appliances, agricultural and aquaculture products and cosmetics, while reducing restrictions on foreign investments in finance, manufacturing and agriculture and substantially expand market access to these.

EU companies in China have been concerned about access to markets in the service and manufacturing sectors, and their chamber is thus happy to see changes here, according to Zhang Ziting, director of government affairs at the EUCCC.

This year's negative list includes new rules on the openness of the automotive and financial service industries. In their Business Confidence Survey this year, EUCCC members expressed a wish to increase their investments in these markets if China truly opens them, Zhang added.

The European chamber recently released its 2018 Business Confidence Survey, which shows the region's companies in China continued to improve business performance last year.

If a China-EU Investment Agreement comes to fruition, this will clearly signal China's willingness to fulfill its commitment to building a positive domestic business environment for EU firms and give then the confidence to expand, they said, as did 57 percent of surveyed companies who pledged to raise their investment, if China further opens its market.

Editor: Ben Armour