THE HAGUE, May 10 (Xinhua) — The Netherlands hopes that the United States and China will avert a trade war as nobody has an interest in one, said Dutch officials and economists.
Free trade is crucial for the Netherlands, Foreign Minister Stef Blok said Friday, commenting on Washington’s latest threat to raise tariffs on Chinese imports.
“China and the United States are both important trading partners for the Netherlands; the Netherlands is a trading country and has an interest in good agreements,” Blok told Dutch television NOS.
Sigrid Kaag, Dutch minister for foreign trade and development cooperation, said it is difficult to say exactly what consequences the U.S.-China trade frictions will have for the Netherlands.
“But it is clear that Dutch companies producing in China and exporting products to America will be affected,” she told NOS.
Economists with the Amsterdam-based global financial institution ING said the U.S. move is likely to draw Chinese retaliations and thus trigger an escalation, which will take its toll on Europe.
“Demand from the United States and China for each other’s products will be suppressed, with the excess supply possibly dumped on the European market,” said ING economist Timme Spakman. “This potentially eats away at the margins of European producers.”
“Reduced demand and increasing uncertainty in the United States and China will also suppress business investment, which will diminish the chances of European companies exporting capital goods,” he added.
Raoul Leering, ING’s head of international trade analysis, said he believes that Washington’s tariff threat augurs ill for trade, but a U.S.-China trade deal remains likely.
The U.S. government’s decision to raise tariffs on Chinese imports “has once again clouded the already weak trade outlook,” he said. “But we think this will prove temporary because we think a deal between the U.S. and China is still the most likely outcome.”
However, Washington’s tendency to wield tariffs as a stick also casts a shadow over U.S.-European Union (EU) trade, said Leering.
The recent actions of the White House show that tariff hikes remain its “favorite policy tool,” he said.