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What's on everyone's mind in China-US trade war

chinadaily.com.cn | Updated: 2018-07-10 06:40
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Zhang Lianqi, consultant to the Ministry of Finance and a national political advisor. [Photo provided to chinadaily.com.cn]

The 25 percent tariff on $34 billion worth of Chinese goods levied by the United States will increase procurement costs for US high-tech manufacturers, reduce their gross margins and hamper productivity growth, as well as have a negative influence on US employment.

The trade dispute provoked by US President Donald Trump will impact supply and industry chains, which is the key issue. It also hurts US businesses operating in China. The rising costs will be undertaken by consumers, as it is difficult to pass on or replace those costs. Finally, US consumers will pay the bill.

China's economic development has shifted from heavy reliance on exports and foreign investment to consumption-driven growth, and I predict the negative impact of tariffs on China's GDP growth should be about 0.14 percentage points in 2018. Trade wars, dialogue and negotiation will coexist in the coming days. It is a complex and long-term issue.

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