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US-China trade, sub USTR on China tariffs

A Chinese and US national flag hang on a fence at an international school in Beijing on December 6, 2018. (Photo by Fred Dufour / AFP) (Photo by Fred Dufour / AFP via Getty Images)

Fred Dufour | AFP | Getty Images

The United States is taking an analytical approach to its review of whether to keep tariffs on Chinese goods and will not base the outcome on any “breakthrough” in US-China trade relations, Deputy US Trade Representative Sarah Bianchi told Reuters.

The Biden administration is not assuming that such a breakthrough will happen but will continue to negotiate with China at various levels, Bianchi said in an interview on Saturday as a ministerial meeting of the US-led Indo Pacific Economic Framework talks.

“We are conducting the review from an analytical perspective. We are not basing any breakthrough in trade relations with China as part of the review,” Bianchi said. “We are not assuming that will happen.”

Instead, USTR is continuing to study industry and stakeholder comments on the duties, consulting with the US Department of Commerce, Treasury and other agencies to determine which categories make strategic sense, she said.

“We’re looking at what’s good economically,” said Bianchi, who oversees USTR’s engagement in Asia.

Former US President Donald Trump imposed tariffs on thousands of imports from China worth $370 billion in 2018 and 2019 after a “Section 301” investigation found China was misappropriating US intellectual property and US companies was forcing the U.S. to transfer sensitive technology. to do business.

Tariffs currently range from 7.5% on many consumer goods to 25% on vehicles, industrial components, semiconductors and other electronics. The major categories to avoid tariffs were cellphones, laptop computers, and videogame consoles.

The review was required by Section 301 of the Trade Act of 1974 four years after the tariffs were first imposed and it began with preliminary notification steps in May 2022. Bianchi declined to say when the review would be completed, but added that it was “reasonably” towards the end of 2023.

The tariff exclusion on 352 import categories from China was extended by the USTR for another nine months through the end of 2022 and is now set to expire on September 30. Some trade experts in Washington see that date as a possible decision point in the tariff review.

Inflation Arguments

As the review got underway last May, some Biden administration officials argued in favor of lifting some tariffs as the Biden administration struggled to contain high inflation.

US Treasury Secretary Janet Yellen said that eliminating “non-strategic” tariffs would reduce the cost of specific goods, while Trade Representative Catherine Tai argued that the tariffs represented “significant leverage” on China.

Bianchi said inflation-related discussions on tariffs have subsided as inflation has eased.

Chinese Commerce Minister Wang Wentao raised objections to the Section 301 tariffs as an issue of concern during a meeting with Tai in Detroit on the sidelines of the Asia Pacific Economic Cooperation trade meeting.

Wang’s meeting with Tai and Commerce Secretary Gina Raimondo a day earlier was the first cabinet-level exchange in months between Washington and Beijing amid a series of trade and national security setbacks, including a Chinese plane crossing the US continental US. The shooting down of a spy balloon was also included.

Bianchi said it is important for the global economy for the US and China to maintain healthy dialogue, even when they disagree.

“These are the two largest economies in the world and we need to talk at different levels, even if they are difficult talks,” she said.

“Right now on trade, there are not many common approaches,” she said of the US and China. “I’m not sure where it will lead, but I think the conversation will continue to be a difficult one, but I think it’s important that we have it.”

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