Quite apart from the fears of a wider war over the recent United States-British-French missile attack on a Syrian chemical weapons center, there is also a growing fear of a trade war between the US and China which could impact on the Philippine economy.
US President Trump announced on March 1 that the US was imposing tariffs on steel and aluminum imports and, later in April, on Chinese goods, all in an effort to reduce the growing US trade deficit. China promptly retaliated with import levies on US soybeans, cars, and planes.
In addition to the tariffs, the US reportedly plans to impose new investment restrictions and to take further action at the World Trade Organization. China warned the US against triggering a chain reaction that will unleash, it said, “the virus of trade protectionism” around the world.
Investor morale, as gauged by a German research institute, fell in the Eurozone on account of trade war fears. The World Trade Organization expressed fears of a “cycle of retaliation.” Japanese Prime Minister Shinzo Abe is meeting with President Trump in Florida this week, amid concerns arising from Trump’s earlier tweet that Japan had “hit us hard on trade for years.”
Philippine officials are hopeful that a full-blown trade war between the US and China will have only an indirect impact on the Philippine economy. Both Socio Economic Planning Secretary Ernesto Pernia and Finance Secretary Carlos Dominguez III said at Clark last Friday that the Philippines doesn’t rely on exports or imports as much as other countries and so it is “sort of insulated” from the looming trade war.
Still, if such a full-blown trade war develops, everybody will be affected,” Secretary Dominguez said. China today is the Philippines’ top trading partner, accounting in 2016 for $21.9 billion – 15.5 percent – of our country’s total trade. The US was third with $16.4 billion – 11.6 percent.
“Nobody wins in a trade war,” Dominguez said, He said he and all the other Association of Southeast Asian Nations (ASEAN) finance ministers are hoping that cooler heads will prevail and there will be a renewed commitment to openness, to liberalization, and to fairness in world trade.
It is a hope in which we all share – as consumers of both Chinese and American goods, as friends of both the Chinese and American people, as a nation concerned over any dispute that could escalate into a wider and more violent conflict in our part of the world.