President Donald Trump often cites China’s massive exports to the U.S. as a grave injustice hanging over the world economy. But lately it pays to look at Chinese imports for the pain that his tariff wars are inflicting on global growth.
The world’s biggest trading nation last month saw imports from Japan, South Korea and the U.S. fall sharply from a year earlier, according to official data. The 27% fall from the U.S. is perhaps not surprising given a year of tit-for-tat tariffs, but a drop of 16% from Japan and 18% from South Korea is reason to consider the broader effects of Trump’s trade battles.
Such data illustrate why trade is at the top of the agenda for this week’s Group of 20 meeting of leaders who preside over more than three-quarters of the global economy. While much of the focus will be on Trump and Chinese President Xi Jinping’s ability to resume talks, the other leaders in attendance have their own stakes to worry about.
Global commerce is “being hit by new trade restrictions on a historically high level,” World Trade Organization Director-General Roberto Azevedo said in a report Monday that pointed to an increase in protectionist measures by G20 countries. “This will have consequences in increased uncertainty, lower investment and weaker trade growth.”
An analysis released on Monday by Bloomberg Economics of the more than 10,000 Chinese product categories hit by tariffs already found they had led to a 26% fall in the value of their exports to the U.S. in the first quarter of 2019.
That was before the recent breakdown of U.S.-China talks and an increase May 10 from 10% to 25% of tariffs on products worth some $200 billion in annual trade before the conflict, the largest tranche of $250 billion in imports affected. Trump has also threatened to hit a further $300 billion in imports from China.
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