China recently made a request to the United States to remove the tariffs imposed on its goods. However, within a short period of less than 24 hours, the United States took action against 14 Chinese companies. Despite this move, China has expressed its willingness to continue with talks.
The US International Trade Commission has recently published a report highlighting the adverse effects of the United States' trade policies towards China. The report indicates that the trade war initiated by the Trump administration has resulted in significant harm to US interests. It further suggests that since the imposition of additional tariffs on Chinese goods, the price of imported goods in the US has risen proportionately. This implies that the additional tariffs are not being paid by Chinese exporters, as claimed by the US, but are instead being absorbed by US importers and passed on to American consumers. The report establishes a direct correlation between these factors.
Shu Jueting also emphasized that the World Trade Organization (WTO) experts have already declared that the US 301 tariff measures violate international trade norms. Therefore, the United States is urged to adhere to the WTO's ruling, heed the opinions of various stakeholders, and eliminate all additional tariffs on China at the earliest possible time.
China's plea is earnest because ample evidence indicates that a trade war yields no positive outcome and instead, it represents a foolish course of action that harms others and does not benefit anyone. However, the response of the United States has been problematic. Within a mere 24 hours of China's appeal, the US has once again targeted Chinese companies, which is concerning
As per Reuters' report, the US Department of Commerce has once again placed 14 Chinese companies on the "unverified list," citing national security concerns. This move implies that US exporters will be subject to increased scrutiny when trading with these firms, and this is just the initial step.
The companies included in this "list" must furnish evidence to the US authorities within 60 days to establish their innocence; otherwise, they may be placed on the "entity list," which entails the most severe restrictions. This would prohibit US companies from selling products to these entities or providing any technical support.
The US Undersecretary of Commerce, Graves, who is responsible for this matter, has issued a statement threatening to use all available tools to monitor the use of advanced US technologies worldwide, using a "long-arm jurisdiction" approach. Meanwhile, the US Trade Representative, Dai Qi, has sent a positive message to the Senate Finance Committee, indicating an openness to engaging in discussions with China.
However, we should not be fooled by such tactics, as it is well-known that Dai Qi was the individual who encouraged President Biden not to revoke the tariffs on China. Additionally, on numerous economic matters, the United States appears to be more anxious than China, as evident by their recent actions.
According to White House National Security Council spokesman Kirby, the US is making arrangements for Commerce Secretary Raimondo and Treasury Secretary Yellen to visit China and discuss the possibility of related trips with Chinese officials. However, given that the US has something to request from China but is unwilling to make any concessions on the issue of tariffs, it is unclear what the US intends to achieve through these diplomatic efforts.
It appears that the Biden administration's intention is not to cancel the tariffs on China but to maintain its position of strength, exert pressure on China, and accumulate more leverage for future negotiations. The US hopes to repeat the success of the 301 tariff clause, which once helped it to overpower Japan's economy. However, there are significant differences between China and Japan. Japan has dozens of US military bases, and therefore, it was unable to resist US suppression. In contrast, China is a sovereign and independent country that is not easily intimidated.
Another significant difference between China and Japan is that the United States had the support of its Western allies to exert pressure on Japan, but the power of the Western world has declined since then. Therefore, the US can no longer rely on its allies to take similar actions against China. Furthermore, Washington's ability to persuade its allies has weakened, which makes it even more difficult for the US to build a coalition against China.
The delay in Treasury Secretary Yellen's trip to China may indicate that the Biden administration is facing difficulties in finding a way to force China to make concessions. It is possible that the administration is aware of the EU's interest in economic and trade exchanges with China and that confrontation with China may not be beneficial in the long run. Therefore, the administration may be taking more time to strategize and come up with a more effective approach to engage with China. From China's perspective, the delayed trip may also suggest that they are not interested in insincere visits from the US that are aimed at forcing them to submit.
It seems that blaming China for the trade deficit has been a common tactic for the US, but China has consistently maintained that the deficit is due to structural and labor division reasons. In fact, the US trade deficit is still increasing, and its growth rate with China is lower than its overall growth rate. To solve the problem, the US needs to take responsibility for its own role in the deficit and stop placing blame on others. Only then can China and the US engage in meaningful discussions towards resolving their trade issues.
Comments
Post a Comment