Dhaka, Feb 18 (UNB) – International Chamber of Commerce, Bangladesh (ICCB) has said the trade conflict between the United States and China is a major concern for global economy as the two countries are the world’s two biggest economies.
“Trade and economic relations between the two countries are of great significance for world economy,” said the ICCB quoting the editorial of its current news bulletin released on Monday.
For most Asian nations, China is their single biggest trading destination while the US remains an invaluable economic partner.
As a result, ICCB said, the escalating tensions between the two economic giants have caused unease for the region.
Bilateral trade and economic ties between China and the US have developed steadily over the decades and the recent trade friction between these two countries has clouded their relations, said the chamber body.
Based on purchasing power parity (PPP) China has been the world’s largest economy for the last three years having economic output of $23.12 trillion, followed by EU countries ($19.9 trillion) and US ($19.4 trillion) according to 2017 World Fact book of CIA (Central Intelligence Agency).
The world’s three largest economies combined have produced $62.4 trillion, 49 percent of the world’s total economy.
Currently, the US is China’s biggest export market and sixth biggest source of imports. On the other hand, China is the fastest growing export market and biggest source of imports for the USA.
“The tariff fight between the two countries is often cited as the biggest risk to global investor confidence and a threat to the world economy,” said the ICCB.
According to the recently released White Paper by China, regarding trade and economic frictions with the US, trade between the two states reached US$583.7 billion in 2017.
The Trump administration has instigated a trade war with China by imposing tariffs on a total of $250bn of imports from China.
As counter to the US move, China is also imposing tariffs on $110bn of imports from the US. There have been warnings from both the private and public sectors about the potential spillover effects on the world economy of the ongoing trade war between the two world economic powers.
The ICCB said the US and China agreed to a temporary truce to escalate trade tensions, during G20 Summit in Buenos Aires on December 1 last year.
According to the agreement, both the US and China will refrain from increasing tariffs or imposing new tariffs for 90 days (until March 1, 2019).
On January 7, official delegates from the US and China began trade talks, which were held in Beijing — the first face-to-face meeting since agreeing to a 90 days truce. Both sides have agreed to continue to keep in close contact.
The ICCB said a trade war cannot help the entrenchment of trust and constructive cooperation in the US-China relations.
“So, it’s crucial for both the countries to mitigate ongoing rivalry without losing any further time to ensure sustainable global economic growth,” the editorial reads.