Business groups urge U.S. not to impose more tariffs on Chinese imports
July 31, 2018 Category Foreign trade, Weekly
As the U.S. prepares to impose a 25% tariff on an additional USD16 billion of Chinese imports, representatives of American industries that will be affected by the proposed new tariffs voiced their concerns to U.S. officials as part of a hearing on U.S. President Donald Trump’s expanding efforts to exert economic pressure on Beijing. They warned that new duties would be harmful to U.S. businesses, especially those that rely heavily on products that only China can provide, with one witness decrying the “blunt instrument of tariffs”.
The Office of the U.S. Trade Representative called the two-day public hearing in Washington as the government seeks to finalize a list of Chinese products totaling USD16 billion that will be subject to a 25% punitive tariff. The move would be the first expansion of U.S. tariffs on Chinese goods since a similar tax was imposed on USD34 billion worth of goods on July 6. In an indication that those duties are already affecting American agriculture, the administration announced that it was planning to offer USD12 billion in aid to farmers hurt by China’s retaliatory tariffs.
In his opening remarks at the hearing, Representative Kevin Cramer, Republican of North Dakota, offered a defense of Trump’s trade policy. “After years of unsuccessful U.S.-China dialogue, the United States is taking action to confront China over its state-led, market-distorting policy and practices,” Cramer said, adding that it was the “negligence of previous administrations” that had caused the United States’ current trade disadvantage. “It is past time we take strong, defensive action to protect America’s lead in technology and innovation” he said. But the initial testimony from witnesses suggested that it was the tariffs themselves that had provoked strong, defensive reactions. The first round of eight witnesses – of a scheduled 85 individual appearances – voiced unanimous opposition to the inclusion of chemical imports on the proposed list of new duties.
Speaking on behalf of a plastics industry trade association, Richard Braillie urged the administration not to push ahead with tariffs that targeted fluoropolymers, of which Teflon is an example, saying the new tariffs would cause “severe and irreparable damage to the U.S. fluoropolymer industry”. Such duties, Braillie said, would harm more than 4,000 businesses and jeopardize the tens of billions of dollars the industry contributes to the U.S. economy, the South China Morning Post reports.
In a written submission before the hearing, the U.S. Chamber of Commerce expressed its staunch opposition to tariff escalation, saying it would be U.S. businesses and customers who would foot the bill of the “hidden, regressive taxes”. The trade war could still escalate further as President Trump has already laid the groundwork for tariffs on a further USD200 billion worth of Chinese imports, and even indicated that he was willing to impose tariffs on all Chinese products imported to the United States, with the total value of good targeted reaching USD500 billion.
Moreover, China is set to become the focus of Donald Trump’s global crusade for “free and fair trade” after the U.S. reached a deal with the EU to suspend new tariffs and expand European imports of U.S. goods.
China’s judiciary should prepare itself for a possible surge in corporate bankruptcy cases as a result of the trade dispute, state media warned. In an opinion piece in the People’s Court Daily, Du Wanhua, Deputy Director of an advisory committee to the Supreme People’s Court, said that courts needed to be aware of the potential harm the tariff row could cause. “It’s hard to predict how this trade war will develop and to what extent,” he said. “But one thing is sure: if the U.S. imposes tariffs on Chinese imports of USD60 billion, USD200 billion, or even USD500 billion, many Chinese companies will go bankrupt.”
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