Trade wars: China hits back with 84% tariff in retaliation for 104% from US
Where do the latest developments leave South Africa in relation to China and its other BRICS partners?
FILE: Tensions are high between China and the US. Picture: © rolffimages/123rf.com
The Money Show's Stephen Grootes is joined by China specialist Martyn Davies, former member of the World Economic Forum's Global Agenda Council on China.
As global trade wars gain speed in the wake of Donald Trump's latest tariffs on imports to the US, China and Europe are among the latest to hit back with retaliatory tariffs of their own.
Beijing;s announced 84% on US goods, after Washinton imposed a 104% tariff on products from China.
From a Chinese perspective, says China expert Martyn Davies, the country cannot back down in this scenario.
He describes what is happening as the end of globalisation as we've known it post-1990.
"The US has undoubtedly traditionally underpinned this era of global free trade, or liberalised trade - all that work done and the trust built has been destroyed in the last week or so."
Martyn Davies, China expert
"While China has always been self-interested, at least it's predictable where the US has become incredibly unpredictable ever over the last few years, which is catastrophic."
Martyn Davies, China expert
Davies notes that China has been South Africa's biggest trading partner since around 2007/2008, mostly with commodities exported to the Chinese.
What he foresees now is a dramatic rebalancing, especially when it comes to our BRICS partners.
Pretoria has been too politicised around this forum and less pragmatic around trade up to now, is Davies' view.
"That's going to change dramatically. There's not been one preferential trade agreement cut by our government as I'm aware with any BRICS partner over the last decade or so - it's all been rhetoric and geopolitics."
Martyn Davies, China expert
"Now we're going to see a revitalisation of BRICS, translated that is Global South intra South-South trade. Hopefully it will be less politically antagonistic... so, finally can we get BRICS and the emerging markets club of which we're part to be more practical and commercially focused in the interests of the national economy and the interests of South African companies."
Martyn Davies, China expert
Listen to Davies' argument in the interview audio at the top of the article