DUBAI, March 24 (Xinhua) -- The recent U.S. proposal to impose huge tariffs on Chinese imports may lead to China's retaliation and disruption of global trade, exposing the U.S. economy to risks, say economists.
Dr. Nasser Saidi, former chief economist of the Dubai International Financial Center, told Xinhua by e-mail on Friday that U.S. President Donald Trump kept his protectionist campaign promises by imposing tariffs on aluminum and steel earlier and now on intellectual property products on the pretext of "unfair practices," which may trigger a trade war.
This poses "a clear risk that the Trump trade war will disrupt the global trade engine and derail the ongoing global economic recovery," he said.
Trump's moves "are likely to lead to retaliation by China," and the Asian country as the world's second largest economy has "a wide range of options including (imposing) tariffs on aircraft (Boeing and others) and transport equipment, as well as non-tariff barriers," the economist added.
This tit-for-tat scenario poses a risk for global trade, he said, with the global stock markets as an example, which have plunged since Thursday in response to the growing economic policy uncertainty.
In another e-mail interview with Xinhua on Friday, Tim Fox, chief economist of Dubai's biggest banking group Emirates NBD, said these measures by the Trump administration "also expose the U.S. economy to risks if China retaliates, especially against the U.S. agriculture sector."
"Of course, China has the ultimate retaliation card if they want to play it, namely it's holding of U.S. treasuries," Fox said.
Fox warned "Once (the United States) starts a trade war with China, (it) could be very hard to reverse."
U.S. President Donald Trump signed a memorandum on Thursday that could impose tariffs on up to 60 billion U.S. dollars of imports from China and restrict Chinese investments in the United States, fueling fears that the world's two largest economies could be sliding toward a trade war.