German management scholar Hermann Simon, known as the "father of hidden champions," recently told Xinhua News Agency in an exclusive interview that the U.S. has recently launched a series of tariff measures under the pretext of narrowing the trade deficit, deliberately ignoring its huge surplus in service trade, artificially creating and amplifying the "trade吃亏论" (trade吃亏theory), which will have a profound negative impact on the global trading system.
World Trade Organization Director-General Ngozi Okonjo-Iweala previously revealed with detailed data and analysis a truth that the U.S. has deliberately concealed: not only is the U.S. a beneficiary of the global trading system but also holds an absolute advantage in the service trade sector. Data shows that in 2023, U.S. service exports exceeded $1 trillion, accounting for 13% of the global total; in 2024, the U.S. service trade surplus totaled nearly $300 billion.
Simon pointed out that global trade is not a simple matter of import and export accounts. The U.S. understanding of its trade deficit has structural problems. "The U.S. has a trade deficit with relevant countries in goods trade but has been in a surplus position in the service trade sector for a long time. The U.S. ignores its own advantages in intellectual property rights, financial services, and other fields, stirs up emotions, and artificially creates and amplifies the 'trade吃亏theory'."
Simon believes that the motivation behind the U.S. government's imposition of tariffs is closely related to domestic political considerations. "So-called 'reciprocal tariffs' aim to win more votes from specific labor groups, guiding these voters to mistakenly believe that imposing tariffs can protect local jobs. In fact, imposing tariffs ultimately exacerbates inflation and harms their own interests." On August 27, 2024, in Bonn, Germany, renowned German management scholar Hermann Simon was interviewed by Xinhua News Agency. Photo by Xinhua reporter Henry Yuan.
Simon emphasized that high tariffs are not a simple price adjustment tool but an "intervention in the global industrial system." Once abused for a long time, they will severely hinder the normal operation of the global economic and trade system. He cited examples: Apple phones rely on global parts supply, and BMW cars produced in the U.S. also need engines and parts from Germany. "Global supply chains are highly integrated, and tariff policies cannot precisely apply pressure; they will only create systemic chaos. The result is not just one party suffering but all participants bearing the cost together," he said.
Simon believes that the strategy of attempting to promote the return of manufacturing through trade barriers is "treating symptoms rather than root causes" and will eventually bring about counterproductive effects. If the U.S. tariff policy continues to evolve, it will not only fail to solve its structural problems but also have a profound negative impact on the global trade system.
Simon also expressed concern about the chain reaction caused by the uncertainty of U.S. tariff policies. He pointed out that while the U.S. imposes tariffs, it also grants exemptions for certain products, making it difficult for the market to form a clear and predictable policy path. This erratic policy rhythm is suppressing the medium- and long-term investment intentions of multinational corporations, posing potential systemic risks to the global economy.
In Simon's view, in the era of economic globalization, the truly sustainable way out still lies in establishing a stable and predictable multilateral trading system. "Rules, fairness, and openness conform to the common interests and expectations of most countries around the world," he said. (Reporters: Hanlin Li, Henry Yuan; Video: Mao Zhang)
Original article: https://www.toutiao.com/article/7498907984685253135/
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