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Jakarta Post

Insight: China’s efforts to overcome US trade war

  • Jusuf Wanandi

    Vice chair, Board of Trustees, CSIS Foundation

Jakarta   /   Tue, September 17 2019   /  12:21 am

What appears certain today is that friction has afflicted the United States and China and the rest of the world with severe damage. In the first quarter of 2019 imports to the US from the world fell by 1.9 percent. Imports from China fell much worse by 12 percent. Meanwhile, imports to China contracted by 0.5 percent in the first quarter of 2019 after a fall of 6 percent in the last quarter of 2018. Trade has also shrunk by more than 7 percent in the case of South Korea. Even Indonesia’s exports fell by 4.3 percent and imports by 15.3 percent. These numbers are scary already. However, possible escalation of the friction is even scarier. Some studies have suggested that in a noncooperative setting tariff rates can skyrocket to 40 percent or even higher. It is hard to imagine what would happen to the world economy if tariff rates are hiked to the range of 40 percent. Such a scenario woul...