It is dangerous for the world’s trading system when countries impose protectionist measures, and even self-defeating given that production chains are global, Singapore’s trade and industry minister said.
Speaking to CNBC on Tuesday, Chan Chun Sing said there are no winners in a situation where countries impose protectionist measures.
“This is very dangerous for the entire global trading system because, when one country after another starts to enact their own protectionist measures using all kinds of reasons, the entire global system will unravel,” he said.
Trade tensions have risen since U.S. and China both threatened tariffs on each other, although there have been talks between the two giants since.
The U.S. last week said it would proceed with 25 percent tariffs on some $50 billion in Chinese goods, with a final list of imports to be announced on June 15. China’s Foreign Ministry said Monday it was open in principle to talks with the U.S. but said any trade and business deals with the U.S. would be void if Washington implemented tariffs.
Countries that attempt to go it alone will find it is “self-defeating,” given the increasing inter-dependency between economies and production chains, Chan said, citing the iPhone as a product that isn’t produced by any one country.
“It is a global product chain, a global supply chain, that brings this product about to the market. And we will soon realize that there is no way for us to cut ourselves out from the global production system and it is actually a self-defeating exercise if we just try to have a me-versus-you kind of mental model,” he said.