Trump’s tariffs on Chinese imports to remain “for the moment”
February 23, 2021 Category China News Round-up, Weekly
The United States will keep tariffs imposed on Chinese goods by the Trump administration in place for now, but will evaluate how to proceed after a thorough review, Treasury Secretary Janet Yellen told CNBC. “For the moment, we have kept the tariffs in place that were put in by the Trump administration and we’ll evaluate going forward what we think is appropriate,” Yellen said, adding that Washington expected Beijing to adhere to its commitments on trade. Asked if tariffs worked, Yellen hesitated, then said, “We’ll look at that. We’re in the process of evaluating what our approach should be toward China, but there are a range of issues where we see unfair practices,” Yellen added in the interview with CNBC, citing concerns about China’s behavior on trade, forced technology transfers, and subsidies to high-technology industries. “We want to make sure that we do address and hold China to its international obligations in these areas.”
The White House last month said it would review all national security measures put in place by former President Donald Trump, including an interim trade deal with Beijing. The deal eased tensions between the world’s two largest economies after a damaging trade war that U.S. experts estimate led to a peak loss of 245,000 American jobs, but most of the tariffs remain in place on both sides. China pledged to buy USD200 billion in additional U.S. goods and services over two years under the interim deal of January 2020, but Beijing fell 42% short of its target for last year, the Global Times reports.
New trade talks are not expected to begin until the Biden administration formulates a systematic economic policy toward China, probably in the second half of 2021. Chinese Foreign Minister Wang Yi called on the U.S. “to remove unreasonable tariffs on Chinese goods, lift its unilateral sanctions on Chinese companies and research and educational in?stitutes and abandon irrational suppression of China’s techno?logical progress.”
The U.S. Agriculture Department (USDA) said in a report that the value of U.S. farm exports to China will reach USD31.5 billion in the federal financial year ending September 30, the highest ever. The department raised its estimate 17% from November, citing a surge in shipments and sales in the quarter from October through to December, most notably in corn. China will remain the largest U.S. agricultural market this year, followed by Canada and Mexico. American companies would lose hundreds of billions of U.S. dollars if they slashed investment in China or if the nations increased tariffs, the U.S. Chamber of Commerce said in a report. The U.S. gross domestic product (GDP) would see a one-time loss of as much as USD500 billion should U.S. companies reduce foreign direct investment (FDI) in China by half. Applying a 25% tariff on all two-way trade would trim U.S. GDP by USD190 billion annually by 2025, the U.S. Chamber of Commerce said in a joint study with the Rhodium Group.
The report found that losing access to China’s semiconductor market would cause USD54 billion to USD124 billion in lost output and put 100,000 U.S. jobs at risk. The imposition of tariffs could result in as much as USD38 billion in output losses and nearly 100,000 lost jobs in the chemicals industry. Losing access to China’s market for U.S. aircraft and commercial aviation services could cost USD51 billion annually in output. Lost market share in medical devices would result in USD23.6 billion in annual revenue, the South China Morning Post reports.
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