As many experts have warned: Trade wars can be rife with consequences.
Alibaba founder Jack Ma on Wednesday revealed the latest possible repercussion of the United States’ tit-for-tat tariff dispute with China when he rescinded his pledge to create 1 million U.S. jobs.
Early last year, when Ma — who announced his plans to retire from his role as Alibaba’s executive chairman in 2019 — met with President Donald Trump, he vowed to help the U.S. add 1 million jobs through his mega e-commerce platform. But in an interview with China’s official news agency (Xinhua) this week, Ma said the recent waves of tariffs implemented by the Trump administration compelled him to abandon the pledge.
“This commitment is based on the China-U.S. friendly cooperation and the rational and objective premise of bilateral trade,” Ma said. “The current situation has already destroyed the original premise. There is no way to complete the promise, but we will not stop our efforts and will work hard to promote the healthy development of China-U.S. trade.”
Since March, when Trump announced sweeping steel and aluminum tariffs on imports from several countries — including China — the two major world powers have gone back and forth with threatened and enacted tariffs. In July, the Trump administration imposed a 25 percent levy on $34 billion in Chinese goods. And last month, the Office of the U.S. Trade Representative announced that another $16 billion worth of Chinese imports would be subject to levies of 25 percent.
The latest round in the fight came this week when the U.S. firmed up plans to impose levies of 10 percent on $200 billion in Chinese goods. The levy takes effect on Sept. 24 and will rise to 25 percent at year’s end. China responded with tariffs on $60 billion worth of American products, including clothing, furniture and auto parts.
Ma’s latest interview marks at least the second time this week he spoke out against the U.S.-China trade war. During an annual investor conference at Alibaba’s headquarters on Tuesday, Ma warned business and political leaders that the trade war could last “maybe 20 years.”
“It’s going to last long; it’s going to be a mess,” he said.
Trade organizations such as the Footwear Distributors and Retailers of America and the American Apparel and Footwear Association have lambasted the trade war since threats started looming at the start of the year — warning that the United States’ reputation could be harmed globally, while rising import/export costs would be passed on to consumers.
AAFA president and CEO Rick Helfenbein this week said he was “extremely disappointed” in Trump’s latest round of levies on China.
“[The] announcement shows a deep disregard for American businesses, American workers and American families, who will be negatively impacted by this decision. This is a very dangerous game to play, one that will not end with a winner,” he said.