Two parties don’t trade with each other unless both parties benefit. Nobody “wins” a trade war, it’s just a question of who gets hurt less. From Mike Mish Shedlock at mishtalk.com:
I have been warning about the increasing likelihood of a serious global trade war for quite some time.
That warning is now my baseline scenario. Unless there is an immediate deescalation of rhetoric and a return to rational thinking, a very destructive global trade war is baked in the cake.
I seek ways that a global trade war does not start, but I come up short.
China is upset because the EU and US Rejected China’s Market Economy Status over alleged steel dumping. In response, Beijing fired counterattack charges at the WTO.
China has launched a legal challenge against the EU and US over their reluctance to treat it as a “market economy” under World Trade Organisation rules.
Beijing is unhappy with a provision that allows trading partners to use a special formula and prices in third countries to calculate punitive tariffs for non-market economies in anti-dumping cases. It is pushing for the provision to expire with Sunday’s 15th anniversary of its WTO membership.
But the EU, US, Japan and other WTO members have resisted the move, prompting China on Monday to take the first step in launching a case with the global trade regulator.
In a statement, China’s commerce ministry said it had requested consultations with both the EU and US and would seek to have a WTO panel rule.
“China has communicated through many channels for the third-country comparison to expire. What’s very regrettable is that EU and US have not acted to allow it to expire. It has had a severe impact on Chinese exports,” it said. “China is protecting its lawful rights and acting appropriately to maintain the WTO rules.”
To continue reading: Global Trade War Baked In The Cake: Boeing Faces China’s Wrath
