Analysis 03-04-2018

Pekin and Washington risk converting the tariff war into a quota war

China and the US could move from a tariff war to a quota war. It is possible that Washington will introduce quotas on the supply of high-tech goods, an area in which China has made a great advance, says Mikhail Beliaev, an analyst at the Securities and Management Institute.

Beliaev told Sputnik that the tariff war unleashed between the US and China can not be expected to end soon, as Washington seeks to contain China.

The Ministry of Commerce of China responded on April 1 to the imposition of new tariffs by the US on Chinese steel and aluminum supplies. Pekin introduced tariffs on 128 US-produced goods. According to Beliáev, with this response, China expects the US to cancel tariff rates on steel and aluminum as soon as possible.

However, the US restrictions are only a pretext to contain China, the analyst said.

The expert of the Securities Market and Management Institute said that both countries are very close to applying quotas and that other types of restrictions are introduced that are more harmful and at the same time more discreet

Direct quotas are a brusque step of confrontation that is open to everyone, while the imposition of technical obstacles to imports is more discreet, but they are more effective and work harder, he said.

The interlocutor of Sputnik emphasized that it is very difficult to justify the imposition of quotas when the rhetoric of both countries speaks of cooperation and globalization. For its part, when introducing technical obstacles, it can always be justified with the need to observe the ecological and technological standards.

The analyst explained that the US can introduce quotas to the supplies of high-tech goods since precisely in this area China is making great advances. According to Beliáev, Washington will impose barriers in the field of high technologies for two reasons. The first reason implies its direct confrontation with China and with the second it seeks to prevent China from consolidating its positions in the global markets of the digital sphere.

SPUTNIK

 
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