Prime Minister of Singapore Lee Hsien Loong has urged caution over the impact of trade tariffs for all countries in the backdrop of the rising tensions between the United States of America and China over trade disputes. He was speaking at the opening of Boao Forum for Asia Annual Conference today organised in the southern island province of Hainan in China.
"Singapore does not believe that unilateral tariffs are the correct solution as they are not compliant with the World Trade Organisation’s (WTO) rules," said PM Lee in the conference whose theme was ‘An Open and Innovative Asia for a World of Greater Prosperity’.
“More fundamentally, as economists point out, the focus on bilateral trade imbalance between the US and China is misplaced. What matters to a country is not its bilateral trade balance with a specific trading partner, but its overall trade balance with the rest of the world. Furthermore, the cause of a trade deficit is an imbalance in the domestic economy, in particular when a country consumes more than it produces,” he added.
The Prime Minister observed that China has responded to United States’ trade salvos accordingly and is “careful and calibrated”.
“Nevertheless, there is now a serious dispute. Everyone still hopes that before these tariffs are implemented, the two countries will be able to work out an accommodation and head off further escalation,” PM Lee said.
He also spoke on China’s growing role in the international system, and the importance of its efforts to uphold openness and multilateralism.
On the trade frictions between China and the US, PM Lee expressed hope for both powers to work out an accommodation and head off further escalation, so as to safeguard global prosperity and a stable and peaceful world.
The conference was also attended by world leaders from Austria, the Netherlands, Pakistan, the Philippines and Mongolia.