President of Conoscere Eurasia Association on tariff barriers and whether Trump administration can hit Chinese and Asian economies
The new Trump administration has already announced the possibility of raising duties and tariffs on goods from China and Asia in general, but these tariff methods are in practice comparable to sanctions, albeit under a different name – as stated by Professor Antonio Fallico, the President of Conoscere Eurasia Association, at the 17th Verona Eurasian Economic Forum in Ras al Khaimah (UAE)
“The new Trump administration is expected to raise duties and tariffs on imported goods, especially from China and Asia in general. This move is expected to hit the economies of China and other Asian countries and contribute to the re-industrialisation of the US. There is talk of tariffs of 20 percent and even up to 60 percent for some Chinese goods. Will the countries concerned wait like lambs to be eaten by the grey wolf? What are they preparing for themselves? What could be the consequences of such decisions on the part of Americans? These tariff methods are in practice comparable to sanctions, albeit under a different name. They are arbitrary and unilateral. Only sanctions imposed by the UN Security Council are legally legitimate and binding,” Antonio Fallico said. “By the way, I will say without going deeper: all sanctions are dictated by economic, political considerations, the desire to weaken competitors, and not to get concessions from them. The expected tariff barrier could be complemented by tax and financial measures to promote America’s industrial development. This trend began under the first Trump administration and was then continued by the Biden administration, which in effect pursued a kind of industrial ‘Trumpism’ without Trump, but the second Trump administration may resume this course more intensely and radically.”
“Of course, one could say that import tariffs were just a campaign argument to win the support of the voters of the so-called Rust Belt, the former industrial heartland of the US, and that it remains to be seen what decisions will be made in practice and on what scale. In any case, it is clear that such actions reflect the inability to resist competition by market methods, in fair competition. This is not just about China. But it is not a fact that they will bear fruit,” the Italian expert added.
As one example, Antonio Fallico cited Taiwan Semiconductor Manufacturing Co. (TSMC) – the world’s largest semiconductor manufacturer – which took advantage of many American government incentives to move part of its production to American soil.
“It is understandable that Americans would like to regain at least partial control over the production of these strategic items and get it off the island, which will sooner or later revert to rival China. Let’s not forget: Chinese think in terms of decades and centuries, rather than short election cycles as in the West. Anyway, TSMC Corporation is to build three manufacturing facilities in Arizona. As part of the Chips and Science Act of 2022 (one of the elements of ‘Trumpism’ without Trump!), the company is counting on $6.6bn in US government guarantees and $5bn in loans, in addition to more than 25 percent in tax credits. But there have been delays, labour disputes and other problems in the implementation of this project. Work is progressing, but not at the expected pace,” the Professor noted.
In other words, money is not yet a guarantee of a concrete result. In any case, the new aggressive US tariff policy, if implemented, will certainly change markets in various parts of the world.
