IMF urges US to maintain open trade system; experts say comment is criticism of its crackdowns on Chinese products
The US would be better served by maintaining its open trade system, the International Monetary Fund (IMF) said on Thursday, in response to media inquiries on the US' latest move to aggressively hike tariffs on Chinese goods, warning such trade restrictions can fragment the global economy and supply chains and trigger retaliatory actions.
These restrictions can lead to distortion of global trade and investment, and fragmentation caused by such moves can be "very costly for the global economy," IMF spokesperson Julie Kozack said during a regular press briefing on Thursday.
Experts saw these comments as an official criticism and rebuttal of the US escalating crackdowns on numerous Chinese products and industries that hold global competitive advantages, calling the US moves "hostile economic bullying" motivated by political excuses.
The IMF's remarks came after the US government launched new tariffs on Tuesday, targeting a range of Chinese imports, including electric vehicles (EVs), lithium batteries, photovoltaic cells, critical minerals, semiconductors, steel, and aluminum. These tariffs were imposed on top of existing tariffs under Section 301, which a WTO panel ruled in September 2020 violated WTO rules.
Further intensifying its crackdown measures, the US announced on Thursday its plan to block imports from 26 Chinese textile companies due to their alleged ties to the so-called "forced labor." This move adds to existing bans under a relevant entity list.
The US' unilateralism and trade protectionism, driven by its short-term political interests, will have highly detrimental impacts on global trade, Gao Lingyun, an expert at the Chinese Academy of Social Sciences, told the Global Times on Friday.
Gao cautioned that these actions will reduce efficiency in global supply chains and increase risks, ultimately undermining the health of not only the US economy but also the entire global trade and economy.
In a similar vein, the US on Wednesday passed the Biosecure Act that would prohibit US federal agencies from contracting Chinese biotech companies under the excuse of "national security," following a slew of groundless sanctions against multiple Chinese advanced industries.
On Wednesday, Chinese Foreign Minister Wang Yi rebuked the US for frequently imposing unilateral sanctions, calling it "a most typical case of hegemonism and bullying," revealing that it has lost confidence and direction.
Wang urged the US to earnestly observe WTO rules and immediately cancel the sanctions, and vowed to take all necessary measures to defend China's rights and interests.
The recent intensive crackdown measures suggest that the US has become irrational in its handling of economic and trade relations with China, Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Friday, noting the moves are part of the Biden administration's political maneuvering in an election year.
In response to the latest bans on Chinese textile companies, Li said that "China has been actively boosting economic development in Northwest China's Xinjiang Uygur Autonomous Region and has achieved fruitful outcomes in recent years. The US actions will not have a lasting substantive impact on the relevant enterprises due to China's vast consumer market, which can offer robust support and drive for the industry's development."
During the IMF's press briefing, Kozack expressed the hope that China and the US would make joint efforts to address the underlying concerns that have exacerbated trade tensions between the two countries.
The IMF spokesperson also emphasized the noticeable increase in trade restrictions worldwide in recent years. In 2019, there were 1,000 trade restrictions documented, which increased to 3,000 in 2023, resulting in escalating costs for the global economy, according to IMF.
Earlier this month, China's Foreign Ministry spokesperson Lin Jian urged the US to act on its commitment of not seeking to hold back China's economic growth and create an enabling environment for China-US relations and cooperation in various fields, in response to IMF Deputy Managing Director Gita Gopinath's call on May 7 for pragmatic steps toward rebuilding trust between China and the US.