Biden Finally Rethinking Trump's China Trade War

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(MENAFN– Asia Times)

China has urged the United States to cancel all extra tariffs imposed on its goods after top US officials said taxes on only certain manufactured goods would soon be lifted.

Shu Yuting, a spokesperson at China’s Ministry of Commerce, said on Thursday (June 9), said the cancellation of all US tariffs on China would benefit both economies and the whole world, in the interests of businesses and consumers.

Her comments came after US Treasury Secretary Janet Yellen said on Wednesday the US would cancel some of the tariffs on Chinese goods in the coming weeks in a bid to reduce US inflation, which is running at a 40-year high.

US Commerce Secretary Gina Raimondo said on Sunday it could make sense to lift tariffs on things like bicycles and household goods, but not heavy industry products such as steel and aluminum.

It is expected that the US would soon make a decision on whether it would maintain the first batch of Section 301 tariffs on US$34 billion worth of Chinese goods, which are set to expire on July 6. The second batch imposed on $16 billion of Chinese goods will expire on August 23, while a third batch on US$200 billion will be up on September 24.

Since a trade war between the US and China broke out in mid-2018, relations between the world’s two biggest economies have sharply deteriorated. Then-US president Donald Trump imposed tariffs in two waves on around $400 billion worth of Chinese goods shipped to the US, in a bid to bring down America’s trade deficit with China.

On January 15, 2020, Trump and Chinese Vice-Premier Liu He signed a so-called phase one trade deal, which required China to boost purchases of US farm and manufactured goods, energy and services by $200 billion above 2017 levels over two years to the end of 2021.

However, China purchased only 57% of the US goods it promised under the deal, according to the Peterson Institute For International Economics, a Washington-based think tank.

On May 7, the Office of the US Trade Representative (USTR) started collecting industry comments on the Section 301 tariffs on the first batch of Chinese industrial imports. The consultation will end on July 5.




US Trade Representative Katharine Tai. Photo: US-China Business Council

US Trade Representative Katherine Tai said on Monday the Biden administration would begin defining its vision for another key trade initiative with 13 Asian countries over the next two weeks.

Tai added that fighting inflation was a more complicated issue and could not be addressed with a“singular focus” on China tariffs.

Yellen told a US House of Representatives Ways and Means Committee hearing on Wednesday that the Biden administration was looking to“reconfigure” tariffs on Chinese imports, as some of the tariffs were being paid by American consumers and businesses and not the Chinese.

However, she agreed that such tariff cuts would not be a“panacea” for easing high US inflation.

Since the Biden administration took office last year, Beijing has frequently criticized it for maintaining Trump’s tariffs, noting that they have hurt the interests of US consumers and businesses most.

“We have been aware of the US officials’ recent remarks on considering lifting tariffs on China,” Chinese commerce ministry’s spokesperson Shu Yuting said on Thursday.“In the context of high global inflation, the cancellation of all extra tariffs on Chinese goods will fulfill the interests of businesses and consumers and benefit both China and the US, as well as the entire world.”

Qin Gang, China’s ambassador to the US, said on May 26 that China would not back down if Washington decided to extend the first batch of Section 301 tariffs. Qin said China had enough space and policy tools to address the economic challenges caused by the tariffs.

Last October, Tai said China currently owned 60% of steel production and 80% of solar cell production globally through its“unfair” trade policies and had already spent at least $150 billion, with more on the way, to establish a world-leading semiconductor industry by 2030.

Tai said the US should take a new, holistic and pragmatic approach to its relationship with China over the long term.




China’s cheaper solar panels made it harder for US companies to compete. Photo: Supplied

On Monday, the Biden administration said it would waive tariffs on solar panels imported to the US from Cambodia, Malaysia, Thailand and Vietnam for 24 months.

The decision came after the US Commerce Department launched an investigation in March to ascertain whether Chinese solar panel makers were evading US tariffs by moving their operations to Southeast Asia.

Last month, US Energy Secretary Jennifer Granholm said many solar projects in the US had been halted as concerns rose that imports of solar panels from Chinese firms based in Southeast Asia countries could be subject to US tariffs during the investigation.

Chinese media said China’s solar panel makers in Southeast Asia would benefit from the waiver of US tariffs in the short run, but it also meant that more industry players would move out from China over the long run.

Foreign Ministry spokesperson Zhao Lijiang on Tuesday criticized the US for waiving extra US tariffs for solar cell makers in some Asian countries but not China. Zhao said the US must stop disrupting China’s solar supply chain, including by using the so-called“forced labor” problem in Xinjiang as a reason to penalize Chinese producers.

Li Xingqian, head of the Department of Foreign Trade of the Ministry of Commerce, admitted on Wednesday that China had lost manufacturing orders this year due to virus outbreaks but that the situation remained manageable.

Li said it was normal that some Chinese manufacturers were moving overseas to globalize their businesses, without naming any particular sectors.

Read: Solar panels a portrait of China supply chain risks

Read: China defiant amid new US trade war threats

Follow Jeff Pao on Twitter at @jeffpao3

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