U.S. likely go for soft protectionism after China moves away from trade war, analyst

Record ID: 164785

  • Title: U.S. likely go for soft protectionism after China moves away from trade war, analyst
  • Date: 17th January 2017
  • Summary: DAVOS, SWITZERLAND (JANUARY 17, 2017) (REUTERS) PEOPLE INSIDE WORLD ECONOMIC FORUM (WEF) CONGRESS HALL WOMAN LOOKING AT HER PHONE PEOPLE ATTENDING WEF GATHERED AT HALLWAY U.S. VICE PRESIDENT JOE BIDEN WALKING PAST PEOPLE AT CONGRESS HALL VARIOUS OF FORMER BRITISH PRIME MINISTER GORDON BROWN WALKING PAST DELEGATES WALKING PAST RWANDAN PRESIDENT PAUL KAGAME WALKING PAST WEF FOUNDER KLAUS SCHWAB WALKING PAST PEOPLE USING THEIR MOBILES CHINESE PRESIDENT XI JINPING SPEAKING AUDIENCE COMING OUT OF ROOM WHERE THE CHINESE PRESIDENT WAS SPEAKING (SOUNDBITE) (English) CHIEF ECONOMIST IHS MARKIT, NARIMAN BEHRAVESH SAYING: "They want to give an appearance they have been tough on China. What China is saying back, what President Xi said today was they are not going to play this game. They will try and rise above this. They are not going to engage. They are not going to fight back unless of course the U.S. does something stupid. So I think from that perspective I think it was a good move on President's Xi's part to say look 'we are not going to start anything." MAN USING MOBILE PHONE TO FILM CONGRESS HALL (SOUNDBITE) (English) CHIEF ECONOMIST IHS MARKIT, NARIMAN BEHRAVESH SAYING: "But very importantly what he said was commitment, if you will, going forward, China is going to open up its borders to more trade. It's going to open up to more foreign investment. They will make sure their currency is not a destabilising force. And very important and this really was to Trump, we don't want to do a currency war. Don't want to get a trade war. And so hopefully those messages will be heard by the Trump people." XI SEEN SPEAKING THROUGH GLASS DOOR (SOUNDBITE) (English) CHIEF ECONOMIST IHS MARKIT, NARIMAN BEHRAVESH SAYING: "I think in the end the kind of protectionism the U.S. might engage in will be much more subtle, much softer protectionism. The real kind of hard stuff, raising tariffs, I don't think they are going to do that, we think that the probability of that is fairly low." PEOPLE AT CONGRESS HALL
  • Embargoed: 31st January 2017 15:27
  • Keywords: China Xi Jingpin Donald Trump WEF Davos USA
  • Location: DAVOS, SWITZERLAND
  • City: DAVOS, SWITZERLAND
  • Country: Switzerland
  • Topics: Government/Politics,International Trade
  • Reuters ID: LVA0015ZGWLFX
  • Aspect Ratio: 16:9
  • Story Text:Analyst and IHS Markit Chief Economist, Nariman Behravesh said on Tuesday (January 17), the U.S. is more likely to go for soft protectionism after China's President Xi Jinping delivered a speech advocating globalisation at the World Economic Forum (WEF).
    Chinese President Xi Jinping offered a vigorous defence of globalisation and free trade in a speech which underscored Beijing's desire to play a greater global role as the United States turns inward.
    Likening protectionism to "locking oneself in a dark room" to protect from danger, but at the same time depriving the room of "light and air", he cautioned other countries against pursuing their own interests at the expense of others.
    Xi did not mention Donald Trump in his speech of nearly an hour but many of the messages he sent seemed directed at the U.S. president-elect, who campaigned for the White House on pledges to protect U.S. industries from foreign competition and levy new tariffs on goods from China and Mexico.
    "They want to give an appearance they have been tough on China. What China is saying back, what President Xi said today was they are not going to play this game. They will try and rise above this. They are not going to engage. They are not going to fight back unless of course the U.S. does something stupid. So I think from that perspective I think it was a good move on President's Xi's part to say look 'we are not going to start anything," said Behravesh.
    "But very importantly what he said was commitment, if you will, going forward, China is going to open up its borders to more trade. It's going to open up to more foreign investment. They will make sure their currency is not a destabilising force. And very important and this really was to Trump, we don't want to do a currency war. Don't want to get a trade war. And so hopefully those messages will be heard by the Trump people," said Behravesh and added "I think in the end the kind of protectionism the U.S. might engage in will be much more subtle, much softer protectionism. The real kind of hard stuff, raising tariffs, I don't think they are going to do that, we think that the probability of that is fairly low."
    Xi's appearance, a first for a Chinese leader at the annual meeting of political leaders, CEOs and bankers in Davos, came as doubts emerge about whether the United States will remain a force for multilateral cooperation on issues like trade and climate change.
    Europe, meanwhile, is pre-occupied with its own troubles, from Brexit and militant attacks to the string of elections this year in which anti-globalisation populists could score gains.
    This has left a vacuum that China seems eager to fill.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2017. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register