The United States enjoys a substantial services trade surplus with trading partners, contradicting U.S. President Donald Trump's claim that the latest tariffs are an answer to the country's trade deficit, said Hu Wei, the CEO of Bank of China U.S.A.
In an interview with China Global Television Network (CGTN) on the sidelines of the Harvard College China Forum, which was held at Harvard University from Friday to Sunday, Hu expressed concerns about the U.S. president's tariff policy.
"When we talk about trade, especially open and free trade, definitely, we do believe trade will benefit all of us," he said.
While it is true that the U.S. imports more goods than it exports with many countries, Hu stressed that Trump has overlooked its surplus in the huge range of services it exports such as banking, technology and travel.
"When we talk about trade, traditionally, we just talk about the trade of goods. But actually during the past several years, the trade of services has increased quite fast," he said.
Hu called for urgent dialogues to stop the financial damage created by some of the steepest duties the U.S. has ever imposed.
"You have to understand each other, you have to know what they are thinking, whether they agree and disagree. You have to listen to them and take care of each other's interests," he said.
Under the theme of "Navigating Changing Times", this year's Harvard College China Forum is expected to help forge international cooperation amid the current perilous moment amid conflicts and wars, as well as rising economic uncertainties caused by tariffs.
Founded in 1997, the annual forum is the longest running student-run conference on China in North America. It brings together global leaders from a diverse array of sectors to talk about the most pressing issues impacting China in Boston, Massachusetts every April.
US enjoys huge services trade surplus with trading partners: Bank of China USA CEO
The universal "reciprocal tariffs" imposed by the United States signals a decline in the U.S. economic dominance and dollar hegemony, as the country is attempting to extract excessive financial benefits from its trading partners, according to economists, who warn the Trump administration is playing a "dangerous game".
U.S. President Donald Trump last week signed an executive order on the so-called "reciprocal tariffs," imposing a 10-percent "minimum baseline tariff" before unveiling higher rates on certain trading partners. The policy sent shockwaves throughout the global economy and triggered panic on financial markets, with analysts warning of significant risks and dire economic consequences.
In an interview with the China Global Television Network (CGTN), Hong Hao, chief economist of the GROW Investment Group, a Shanghai-based hedge fund, said the tariffs reflect Trump's strategy to extract economic benefits from trading partners, particularly viewing China as a significant competitor. "Trump really believes that the trade terms with the trading partners have been unfair to the U.S., and as a result, the U.S. manufacturing sector has been hollowed out. Therefore, the U.S. is paying an excessive price for globalization, and now, it's time to pay back. I think, from this angle, he is trying to extract economic rent from its trading partners, and also he is trying to see China as one of the major U.S. rivals at this juncture. So, I think, as a result, he is playing a very dangerous game. And, as you can see, it's political theater in the sense that he is trying to dramatize the extreme pressure, so that he can get excessive rent from the opponent," he said
Trump's unilateral imposition of tariffs has eroded global confidence in the U.S. and its dollar's status, leading many to state that the American hegemony may not persist, according to Josef Gregory Mahoney, a professor of politics and international relations at East China Normal University.
"The U.S. economy is at an inflection point. There is a moment where the previous strategies being used to sustain American hegemony were no longer working. And, it's only a matter of time before the U.S. position erodes, given the fact that it's been a house of cards built on the dollar supremacy. And a lot of people don't see that as having a brighter future. This has moved past the theater stage and has moved really directly into one in which no one really has confidence in the U.S. anymore. No one has confidence in the dollar. No one has confidence in the U.S. being committed to the multilateral system, to global trade and so forth and so on," he said.
Trump playing "dangerous game" as tariff measures signal decline in U.S. dollar hegemony: economists
