USTR to review China tariffs amid increasing pressure as absurd policy consumes its economy
Published: Mar 02, 2023 10:14 PM
tariff Photo:VCG

Port Photo:VCG

The US Trade Representative's (USTR) office on Wednesday said it will continue to extend targeted tariff exclusions for Chinese imports and conduct review process on the tariffs, another sign that the illegal US tariffs on China have failed and are consuming its own economy, experts said.

Experts said that the review process is merely a statutory procedure after businesses reported tariff-related losses, and it offers few signs of a warming of bilateral trade relations. They urged the US to ditch its absurd policies on China and stop its trade bullying, which has undermined its own economy and the multilateral trading system.

The USTR made the remark in the 2023 Trade Policy Agenda and 2022 Annual Report submitted to the US Congress on Wednesday local time, adding that it will keep open the option of further tariff exclusions.

In response to a question about the tariffs, a senior official at the USTR said the US will continue to evaluate whether to lift tariffs on China in the coming months, reported.

The comments showed that the illegal tariffs have met with increasing pressure from US businesses, and have failed to meet almost all of their goals, He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Thursday.

"If the US tariffs on China are successful and businesses are satisfied, they won't be reviewed. The move means that the tariffs have caused problems and are creating bigger and bigger obstacles at home," He said.

The tariffs, which were originally imposed by then-President Donald Trump based on Section 301 of the Trade Act of 1974, were largely kept in place under the Biden administration.

The brunt of the tariffs is mostly borne by US consumers and companies, and the effect is exacerbated by inflation and supply chain disruptions.

As part of the review process, interested Americans can submit comments to the USTR. The almost 1,500 comments filed paint an ugly picture - higher costs and prices, and less investment in workers and capital, according to the Cato Institute, a Washington-based think tank.

Thousands of disgruntled American importers are demanding billions of dollars in compensation in a US court as President Joe Biden has stuck with most of the Trump-era tariffs since taking office in January 2021, the South China Morning Post reported on Tuesday.

These firms contend that the US government unlawfully disregarded public comments and did not assess the damaging effects on the US economy before imposing additional duties. The number of plaintiffs has surpassed 6,000, according to the report.

US importers have paid nearly $123 billion to cover the cost of the tariffs imposed on Chinese goods since 2018, according to the US Customs and Border Protection.

A study by economist Pablo Fajgelbaum of the University of California found that tariffs through 2019 had led to a net loss of $16 billion annually to the US economy, media reports said.

"The US government's choice based on its political agenda instead of its people's interests has not been successful," Li Yong, deputy chairman of the Expert Committee of the China Association of International Trade, told the Global Times on Thursday.

Despite the problems, there is little chance that the US will eliminate the tariffs and change its confrontational stance toward China, experts said.

As the USTR moves through the review process, there is little possibility that the Biden administration will eliminate the tariffs in the near future "because it needs them for political reasons," Li said.

Chen Jia, an independent global strategy analyst, told the Global Times on Thursday that the Biden administration has stepped up suppression of China even more fiercely than his predecessor, with such moves as the CHIPS and Science Act and the Inflation Reduction Act, which have caused severe damage to global supply chains.

The hostile attitude is reflected in the USTR's report, which maintained its unfounded accusations on China's trade practices. It released a 2022 Report to Congress on China's WTO Compliance on February 24, which also contained groundless accusations that met with strong opposition from China's Commerce Ministry on Wednesday.

China-US trade relations are still overshadowed by politics, and there seems to be no material progress at the moment, Li said.

"If the US wants to escape record high inflation, it should ditch its erratic policies on China and bring ties back to normal," Li stressed.