The French finance minister is warning that sanctions and trade tension between China and the United States could spark a new cold war. Speaking at a conference in Paris on the World Trade Organization’s future, Bruno Le Maire said he felt there is a “real risk” that the two countries could cause a trade war that would hurt every country in the world, Business Insider reports.
“The real risk now is that we enter into a cold war between China and the United States in which all countries, including Europe, come out losing,” Le Maire said. “This open war in trade will be an economic suicide for the whole world. It (the trade war) is quite simply stupid,” he said at the conference.
Le Maire suggested that the World Trade Organization must address the looming crisis by enforcing international trade rules. He also said the organization needed to get out of its “paralysis of the consensus” that is holding up enforcing rules.
The U.S. under President Donald Trump has imposed $360 billion in tariffs on Chinese imports. China has responded with tariffs on goods from the United States. Trump has often criticized the country over intellectual property theft and industrial subsidies, which he says harms American workers.
The tariff is set to increase on January 1 to 25 percent from its current 10 percent, and the president has threatened to impose tariffs on all Chinese goods if the two countries don’t reach an agreement.
…..China has been taking advantage of the United States on Trade for many years. They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!
— Donald J. Trump (@realDonaldTrump) September 18, 2018
Most recently, the U.S. has demanded trade reforms between the two countries that could end the trade war in what appears to be a softening in Trump’s stance. China responded on Wednesday this week, possibly outlining concessions between the two countries, but no details have been released so far.
Peter Navarro, Trump’s protectionist trade adviser, has been pushed aside as talks between the two countries have been taking place. The adviser recently made comments attacking Wall Street for interfering in discussions between the U.S. and China, which have been met with criticism.
“There are so many disputes between the two countries that it will take many months to iron out a final deal.” Greg Valliere, global strategist at Horizon Investment, said. “But last night’s reports — and the apparent demotion of Navarro — are positive developments, in our opinion,”
Trump and Chinese President Xi Jinping are expected to meet at the G20 summit, which takes place in Argentina at the end of November and beginning of December.