In a recent interview with foreign media, US Commerce Secretary Raymond Mondo said that US President Joe Biden is taking a very cautious approach to the tariffs imposed by the US on China during the Trump administration and is weighing various options.
Raimondo says it gets a little complicated. “President [Biden] is weighing his options. He was very cautious. He wants to make sure that we don’t do anything that would hurt American labor and American workers.”
“We have repeatedly pointed out that there will be no winners in a trade war,” Foreign Ministry Spokesman Wang Wenbin said at a regular press briefing on Wednesday. The unilateral imposition of additional tariffs by the US is not good for the US, China or the world. The early removal of all additional tariffs on China is good for the United States, China and the world.
Dr. Guan Jian, a partner at the Beijing Gaowen Law Firm and a warehousing lawyer at China’s Ministry of Commerce, said that the United States is in the process of reviewing the expiration of the review, which includes more than 400 applications from interested parties, but 24 related labor organizations in the United States have submitted applications to continue the full implementation of the tariffs for another three years. Those views will likely have a big impact on whether and how the Biden administration cuts tariffs.
‘All options remain on the table’
“It’s a little bit more difficult, but I hope we can move beyond that and get back to a position where we can have more discussions,” he said of removing tariffs on China.
In fact, reports that the Biden administration was considering lifting tariffs on Chinese imports began to appear in the US media in the second half of 2021. Within the administration, some, including Raimondo and Treasury Secretary Janet Yellen, are leaning in favor of removing the tariffs, while U.S. Trade Representative Susan Dechi is in the opposite direction.
In May 2020, Yellen said that she advocated the elimination of some punitive tariffs on China. In response, Chinese Ministry of Commerce spokesperson Shu Juting said that under the current situation of high inflation, the removal of the US tariff on China is in the fundamental interests of US consumers and enterprises, which is good for the US, China and the world.
On May 10, in response to a question about the tariffs, Mr. Biden personally responded that “it’s being discussed, it’s being looked at what would have the most positive impact.”
Us inflation was high, with consumer prices rising 8.6% in May and 9.1% at the end of June from a year earlier.
At the end of June, the US again said it was considering making a decision on easing US tariffs on China. Suh said China and the United States should meet each other halfway and make joint efforts to create atmosphere and conditions for economic and trade cooperation, maintain stability of global industrial and supply chains, and benefit the people of the two countries and the world.
Again, White House spokesman Salaam Sharma responded: ‘The only person who can make a decision is the president, and the president has not made any decision yet.’
“Nothing is on the table at the moment, all options remain on the table,” Mr. Sharma said.
But in the United States, removing tariffs is not actually a straightforward decision of the president, according to legal professionals.
Guan explained that under the US Trade Act of 1974, there is no provision that gives the US President the power to directly decide to cut or exempt a particular tariff or product. Instead, under the act, there are only three circumstances under which tariffs that are already in place can be changed.
In the first case, the Office of the United States Trade Representative (USTR) is conducting a review of the four-year expiration of the tariffs, which could result in changes to the measures.
Second, if the president of the United States deems it necessary to modify the tariff measures, it also needs to go through a normal process and provide opportunities for all parties to express their views and make proposals, such as holding hearings. The decision on whether to relax the measures will be made only after the relevant procedures are completed.
In addition to the two paths provided in the Trade Act of 1974, another approach is the product exclusion procedure, which requires only the USTR’s own discretion, Guan said.
“The initiation of this exclusion process also requires a relatively long process and public notification. For example, the announcement will say, “The President has stated that inflation is currently high, and he has proposed that the USTR exclude any tariffs that may affect the interests of consumers. After all parties have made their comments, some products may be excluded.” Typically, the exclusion process takes months, he said, and it can take six or even nine months to reach a decision.
Eliminate tariffs or expand exemptions?
What Guan Jian explained is the two lists of US tariffs on China, one is the tariff list and the other is the exemption list.
According to statistics, the Trump administration has approved more than 2,200 categories of exemptions from tariffs on China, including many key industrial parts and chemical products. After those exemptions expired under the Biden administration, Deqi’s USTR excluded only 352 additional categories of products, known as the “List of 352 exemptions.”
A review of the “352 exemption list” shows that the proportion of machinery and consumer goods has increased. A number of U.S. business groups and lawmakers have urged the USTR to significantly increase the number of tariff exemptions.
Guan predicted that the United States would most likely ask the USTR to restart the product exclusion process, especially for consumer goods that may harm the interests of consumers.
Recently, a new report from the Consumer Technology Association (CTA) showed that US tech importers paid more than $32 billion in tariffs on imports from China between 2018 and the end of 2021, and this figure has grown even larger over the past six months (referring to the first six months of 2022), potentially reaching a total of $40 billion.
The report shows that tariffs on Chinese exports to the United States have held back American production and job growth: In fact, U.S. tech manufacturing jobs have stagnated and in some cases declined after the tariffs were imposed.
Ed Brzytwa, CTA’s vice president of international trade, said it is clear that the tariffs have not worked and are hurting American businesses and consumers.
“As prices rise across all sectors of the U.S. economy, removing tariffs will slow inflation and lower costs for everyone.” “Brezteva said.
Guan said he believed the scope of tariff relaxation or product exclusion could focus on consumer goods. “We have seen that since Biden took office, he has initiated a round of product exclusion procedures that waived tariffs on 352 imports from China. At this stage, if we restart the product exclusion process, the fundamental purpose is to answer the domestic criticism about high inflation.” ‘The damage to the interests of households and consumers from inflation is more concentrated in consumer goods, which are likely to be concentrated in Lists 3 and 4A where tariffs have been imposed, such as toys, shoes, textiles and clothing,’ Mr. Guan said.
On July 5, Zhao Lijian said at a regular press conference of the Foreign Ministry that China’s position on the tariff issue is consistent and clear. The removal of all additional tariffs on China will benefit both China and the United States as well as the whole world. According to US think tanks, the elimination of all tariffs on China will reduce the US inflation rate by one percentage point. Given the current situation of high inflation, the early removal of tariffs on China will benefit consumers and businesses.
Post time: Aug-17-2022