Coronavirus: a common threat that has united the world in unprecedented ways. As the pandemic rages on, however, some are getting anxious and want answers. US officials have accused China of mismanaging the coronavirus and allege that it originated in a Chinese lab. China responded with allegations that the US military planted the virus in Wuhan.
The possibility for escalation is nigh as US President Donald Trump reportedly suggested that China may be punished for its alleged impropriety through new tariffs, sanctions and the lifting of sovereign immunity. As the US seeks to punish China, one wonders what the effects may be on the wider world.
The global economy
The tariffs being floated by the Trump administration as possible punishments will stifle the global economy since, being the two largest economies, the US and China are very much intertwined in the global economy. Consideration must also be given to China, who will retaliate with tariffs of its own.
Tariffs, essentially being a tax on imported goods, will make goods more expensive at a time when many businesses and consumers cannot absorb such a cost. What little spending power exists will diminish, further pushing the economy down. The global economy’s recovery rate will be restricted as supply chains will slowly regain traction amidst low numbers of buyers and sellers. Shocks will hit small open economies especially hard as they greatly depend on foreign production that travels through the US. It is still left to be seen if they will follow through with such plans, however.
Sanctions have more versatility in the sense that they can be applied to certain businesses or individuals within the US banking system. This is effective because the US has a long reach in the world’s financial system. However, depending on where those sanctions are applied, there could be some disruption in the global supply chain because, as mentioned earlier, China is intertwined in the global system. Again, small open economies that regularly do business with China will be in trouble.
The lifting of state sovereign immunity allows American citizens and the American government to sue China for COVID related issues. Removal of the sovereign immunity may have at least two effects. First, it allows the US to fight China with its own rules by allowing lawsuits. Secondly, if state-owned Chinese businesses in US jurisdictions are entangled in lawsuits, China will have to decide if staying in the US is worth the retaliatory lawsuits or risk relocation which may cause disruptions in supply chains.
Considering the implications of this clash to the wider world, both parties have been working to push their narrative to their partners for support. This puts a number of countries with mutual relationships in an awkward position as they must now play chess with their words and actions which, as seen through Australia and the European Union (EU), is quite difficult.
Australia has agreed with the US that there needs to be an investigation into the virus’s origins. To China, not overtly opposing claims that the virus came from a Chinese lab is implicit support of the US’ claims. In response, Chinese newspaper Global Times described Australia as chewing gum on the sole of China’s shoes that needs to be rubbed of; implying a strain in the relationship.
The European Union (EU) has been under the spotlight for editing a report related to disinformation campaigns by China to appease China and for allowing China to censor an opinion piece written by the EU’s ambassador to China. The EU’s move can be seen as bending more toward China by editing its report and allowing China to censor its piece. At the moment, however, this view is balanced out by the fact that the EU said it will support the US’ push for an investigation into the coronavirus’ origins at the WHO general assembly.
Even the WHO?
The WHO itself has been dragged into the fray by the US as Washington has suspended its WHO funding due to accusations that the WHO facilitated China’s hiding of coronavirus statistics. Such an accusation suggests that the WHO abdicated its duty in order to appease China. The US’ actions also serve to weaken the WHO’s ability to help the world at large; more so those who cannot help themselves. Allowing a spat to spill over into the international organization for health during a pandemic is seen by many critics as a way for the Trump administration to deflect any blame it is receiving for its handling of the virus domestically; especially since a Presidential election is due this November.
COVID-19 has led to a pandemic that took the world by surprise. Most people did not think that a virus in China would spread to the world. Nevertheless, it has and people’s magnanimity has shown through like never before. However, it has devolved into a blame game between the world’s most powerful countries about how the pandemic started, capturing many other countries in the fray. But for the pandemic, would the US and China be in this situation? Probably not, but here we are.
The only real way for this situation to stop is if the US recants or if China admits fault. At this point, neither seems likely. One can only hope that the war of words between the two countries does not escalate to a point of no return that drags the rest of the world down as a result.
Renaldo Weekes is a concerned Barbadian