The U.S. unilateral slapping of steep tariffs on China's goods undermines a rule-based multilateral trade regime which has been crucial for global growth, said Nobel Prize-winning American economist Joseph Stiglitz.
The approach taken by President Donald Trump to tackle the trade disputes with China is "primitive," said Stiglitz at a panel discussion at the Havard Club in New York City on Thursday.
After proposing steep tariffs on Chinese imports worth 50 billion U.S. dollars, the Trump administration has threatened to slap additional duties on Chinese goods worth 100 billion dollars. China has hit back proportionally by rolling out its retaliatory tariff plan.
"You cannot solve trade deficit overnight... actually it is stupid to do so," said Stiglitz.
The former World Bank chief economist was joined at the talk by John Lipsky, distinguished scholar, School of Advanced International Studies, John Hopkins University and Scarlet Fu, Bloomberg anchor.
The U.S. unilateral action, which initiates a potential trade war with China, and eventually hurts American consumers as the tariffs will be reflected in prices, he said. And it poses threat to the way the global trade system operates because trade disputes were always done in the framework of the World Trade Organization (WTO) and within international rule of law, he said.
The former World Bank chief economist expressed his concern that Trump, accusing WTO of bias against the U.S., has blocked the appointment of new judges at the organization's seven-member panel that overlooks international disputes. The panel currently only has four members.
The WTO has traditionally appointed new judges based on unanimity, said Stiglitz, who is currently a professor at Columbia University.
The U.S. has not filed any complaints against China with WTO, even though Trump and his cabinet members have cited Beijing's violations of WTO rules because Beijing is availing itself of the special treatment the biggest developing country received when it acceded to the international bloc, Stiglitz said.
The panel discussion is part of the one-day China Institute 2018 Executive Summit, "U.S.-China Business in the New World Order," which brought together hundreds of top U.S. and Chinese CEOs, government leaders, and experts to examine challenges and opportunities in the changing business relations between the two largest economies in the world.
Founded in 1926, China Institute is the oldest bicultural, non-profit organization in America to focus exclusively on China.