The Chinese and American national flags hang on the fence of a global school in Beijing, December 6, 2018. (Photo: Fred DUFOUR/AFP) (Photo: FRED DUFOUR/AFP via Getty Images)
Fred Dufour | afp | Getty’s paintings
The US is taking an analytical approach to reviewing whether to maintain tariffs on Chinese goods and won’t base the outcomes on any “breakthrough” in US-China trade relations, US deputy trade representative Sarah Bianchi told Reuters.
The Biden administration doesn’t anticipate such a breakthrough, but will proceed dialogue with China at various levels, Bianchi said in an interview on Saturday as a ministerial meeting of US-led Indo-Pacific economic framework talks ended.
“We’re reviewing from an analytical perspective. We don’t assume any breakthrough in trade relations with China as a part of the review, Bianchi said. “We do not expect that to occur.”
As an alternative, the USTR continues to review industry and stakeholder comments on the responsibilities, consulting with the U.S. Department of Commerce, Treasury and other agencies to find out which categories make strategic sense, she said.
“We’re taking a look at what’s economically reasonable,” added Bianchi, who oversees USTR’s involvement in Asia.
Former U.S. President Donald Trump imposed tariffs in 2018 and 2019 on 1000’s of products imported from China, price about $370 billion on the time, after a “Section 301” investigation found that China was misappropriating U.S. mental property and forcing U.S. firms to sensitive technology transfer to do business.
Currently, tariffs range from 7.5% on many consumer goods to 25% on vehicles, industrial components, semiconductors and other electronics. Among the many essential categories that avoided tariffs were mobile phones, laptops and video game consoles.
The review was required by Section 301 of the Commerce Act 1974 4 years after the tariffs were first imposed and started with the initial stages of notification in May 2022. Bianchi declined to offer a timeline for completion of the review but added it was “reasonable” to finish 2023
The tariff exemptions for 352 categories of imports from China were prolonged by the USTR at the tip of 2022 for an extra nine months and now expire on September 30. Some trade experts in Washington see the date as a possible decision point within the tariff review.
Inflation arguments
When the review began last May, some Biden administration officials advocated removing some tariffs because the Biden administration struggled to contain high inflation.
U.S. Treasury Secretary Janet Yellen said eliminating “non-strategic” tariffs would lower the associated fee of specific goods, while Trade Representative Katherine Tai argued that the tariffs were “significant leverage” against China.
Bianchi noted that inflation-related discussions about tariffs had died down as inflation fell.
Chinese Trade Minister Wang Wentao raised objections to Section 301 tariffs as a problem of concern during a gathering with Tai in Detroit on the sidelines of the Asia-Pacific Economic Cooperation trade meeting.
Wang’s meeting with Tai and Commerce Secretary Gina Raimondo yesterday was the primary cabinet-level exchange between Washington and Beijing in months over a series of trade and national security setbacks, including the US shooting down of a Chinese spy balloon that flew across the continental US
Bianchi said it was essential for the worldwide economy that the US and China maintain a healthy dialogue, even after they disagree.
“These are the 2 largest economies on the earth and we want to speak at different levels, even in the event that they are difficult conversations,” she said.
“There aren’t many similar prospects in commerce without delay,” she said of the US and China. “I’m unsure where this can lead, but I believe the talks will still be difficult, but I believe it is vital that we’ve got them.”