On The Hill

China Threatens Countermeasures against US, Tariffs

On Thursday (Aug 15), China announced it would take “necessary countermeasures” if President Trump imposes additional tariffs on September 1, further escalating the ongoing trade war between the two nations. “The move by the U.S. seriously violated the consensus reached between the two heads of state in Argentina and Osaka, and deviates from the right track of resolving differences through consultation,” the Customs Tariff Commission of the State Council said in a statement. “China will have to take necessary countermeasures.” The Trump administration announced earlier this week (Aug 13) that a 10 percent duty on cell phones, laptops, and other consumer goods imported from China would be delayed until December 15. Still, the announcement of the delay did not ease Chinese concerns.The delayed items — which also include video game consoles, toys, computer monitors and certain footwear and clothing — account for more than half of the $300 billion worth of Chinese imports that Trump said on Aug. 1 that he would be hitting with a 10 percent duty.^[1] While Trump has continually touted that “China is paying for the tariffs,” critics of the tariffs point to the delay as proof that American consumers will bear the burden. Senate Finance Ranking Member Ron Wyden (D-OR) said Trump’s pursuit of tariffs was a result of his own self-aggrandizement. “Today’s announcement is more proof that Trump’s tariffs have always been about getting the headlines he wants,” Wyden said. “Postponing tariffs on video game consoles and pet toys is giving Trump the stock market bump he wants, but he’s still going ahead with tariffs on books, school supplies and clothes that will hit working Americans the hardest.” The list of Chinese goods that still will be hit with 10 percent duties on Sept. 1 is still quite extensive. It includes beef, pork and many other food and agricultural items.^[2] Chinese Vice Premier Liu He had spoken by phone with U.S. Trade Representative (USTR) Robert Lighthizer and Treasury Secretary Steve Mnuchin, in what appears to have been their first conversation since a meeting two weeks ago in Shanghai.

Date for Next Round of US-China Trade Talks Uncertain

Speaking of a sit-down….Commerce Secretary Wilbur Ross said Wednesday (Aug 14) the two nations have yet to settle on a date for their next round of face-to-face talks.  “I don’t believe a date has been set,” Ross said in an interview on CNBC. Instead, the next step in the long-running negotiations is “perhaps another phone call in a couple of weeks.”^[3] 

Commerce Investigating Circumvention of Steel Tariffs

 On Wednesday (Aug 14), the Commerce Department announced it would initiate an investigation to determine if steel from China and Taiwan are circumventing protective US tariffs.The inquiry will determine if corrosion-resistant steel products made with base material from China and Taiwan are being finished and shipped from Costa Rica, Guatemala, Malaysia, South Africa and the United Arab Emirates to avoid steep penalties. Commerce said shipments of corrosion-resistant steel from the five countries grew exponentially — by as much as 151,000 percent in the case of Malaysia. The increase occurred over a 45-month period before and after the initial investigations on exports from China and Taiwan. The steel products from China are subject to anti-dumping and countervailing duties. Exports of the items from Taiwan are subject only to anti-dumping duties. Allegations of duty circumvention are usually raised by U.S. companies, but the Commerce Department is beginning an investigation on its own.^[4] 

US, Japan Settle on Date for Trade Talks

US Trade Representative Robert Lighthizer and Japanese Economic Revitalization Minister Toshimitsu Motegi are set to meet in Washington Aug 21-22 for continued trade discussions.^[5] Thus far, tariff negotiations have largely been focused on farm products with hope to increase US access to the Japanese agricultural market, though Tokyo has demanded a reduction of tariffs on industrial products as well. The two countries have begun work on text for the proposed agreement, which they hope to have finalized by late September. ^[6] 

References

^[1] Palmer, Doug. “Trump delays China duties on many consumer goods as holidays loom.” Politico Pro. 13 Aug 2019. https://subscriber.politicopro.com/article/2019/08/trump-to-delay-china-duties-on-cellphones-laptops-until-dec-15-1658160

^[2] Palmer, Doug. “Trump delays China duties on many consumer goods as holidays loom.” Politico Pro. 13 Aug 2019. https://subscriber.politicopro.com/article/2019/08/trump-to-delay-china-duties-on-cellphones-laptops-until-dec-15-1658160

^[3] Palmer, Doug. “Ross: No Date for next round of US-China talks.” Politico Pro. 14 Aug 2019. https://subscriber.politicopro.com/article/2019/08/ross-no-date-for-next-round-of-us-china-talks-1661291

^[4] Behsudi, Adam. “Commerce to examine whether Chinese steel is getting around US penalties.” Politico Pro. 14 Aug 2019. https://subscriber.politicopro.com/article/2019/08/commerce-to-examine-whether-chinese-steel-is-getting-around-us-penalties-3723347

^[5]Gallagher, Chris. “Montegi says aiming for US-Japan trade talks August 21-22: Jiji” Reuters. 14 Aug 2019. https://www.reuters.com/article/us-usa-japan-trade/motegi-says-aiming-for-us-japan-trade-talks-august-21-22-jiji-idUSKCN1V504Y

^[6] Jiji “Japan and US close working-level trade talks, with plans for more next week” Jiji Press. 15 Aug 2019. https://www.japantimes.co.jp/news/2019/08/15/business/japan-u-s-hold-working-level-trade-talks-next-week/#.XVbFZ-hKjGg