Towards an easing of US tariffs against China?

US tariffs on $350 billion of imports from China will automatically expire on July 6 if no company asks to keep them.

U.S. tariffs on $350 billion of imports from China will automatically expire on July 6 if no company asks to keep them, the Biden administration announced Tuesday, under pressure to remove them due to record inflation in the US. U.S.

As Americans face a price hike not seen in 40 years and businesses struggle to find essential supplies, President Joe Biden faces mounting calls to end these punitive tariffs imposed by his predecessor Donald Trump.

“Tariffs hurt American businesses and consumers for no good reason,” said Doug Barry, spokesman for the United States-China Economic Council (USCBC), which brings together more than 200 American companies that do business with China.

$350 billion

A first series of tariffs was put in place on July 6, 2018, before three further explosions representing the equivalent of $350 billion in annual imports from the Asian giant.

The former Republican president had taken these measures in retaliation for Chinese business practices deemed “unfair”, denouncing the “theft” of intellectual property or the “forced” transfer of technology.

As it approaches its expiration on July 6, the services of the United States Trade Representative (USTR) announced on Tuesday that they are launching a consultation.

The main employers’ federation (the US House of Representatives), companies and experts in international trade have been calling for months for flexibility or even the elimination of these measures, arguing that they hit hard on small businesses that do not have sources of supply.

“The first step in the process is to inform representatives of national industries that benefit from tariff measures about the possibility of ending these measures and the possibility of requesting their continuation”, explained the USTR in a press release.

“If we don’t receive an order …, we don’t have the authority to keep them” beyond four years, a USTR official underlined during a conference call.

“About 600” notifications will be sent, another official said.

If the customs tariffs were maintained, they could, however, undergo changes.

“All the tools on the table”

A USTR official declined to say whether inflation would be considered, but said the administration will consider “the effects of such actions on the US economy, including consumers”.

Companies have long complained about Beijing’s failure to protect know-how and patents or subsidies to Chinese companies.

Before the Trump era, US administrations sought to resolve these issues through dialogue, the Republican launched an unprecedented trade war.

Donald Trump also got a bilateral agreement, signed in January 2020 and which took effect a month later. But US Ambassador Katherine Tai told Congress in late March that the tariffs did not “encourage” Beijing to change its practices.

On Tuesday, the USTR said it would consider all orders, including raising, lowering or changing rates.

But for Doug Barry, “the USTR seems reluctant” to raise them. “Ambassador Tai continues to claim that tariffs are useful as ‘leverage’ with China, although there is no evidence to support this claim,” he lamented.

Certainly, the USTR has renewed its exemption regime for more than 300 products imported from China, “including bicycles”. It’s “a positive step” but not enough, he says.

“The business community and many members of Congress want tariffs to end,” he said, urging Beijing and Washington to resume talks on subsidies and industrial policy, among other things.

On Monday, Katherine Tai assured that all the tools were on the table and that her administration would “of course look at customs fees” during a conference organized by the Milken Institute, an American think tank.

“But let’s also look at monetary policy, fiscal policy or fiscal policy,” she said.

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