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TWN
Info Service on Climate Change (May24/04) Geneva, 15 May (D. Ravi Kanth) — China on 14 May severely criticized the United States for its allegedly unilateral decision to levy high tariffs on imports of several major products from China, including electric vehicles (EVs), lithium batteries, photovoltaic cells, key minerals, semiconductors, steel and aluminium, port cranes, personal protective equipment, and other products, according to a Chinese commerce ministry statement. The Biden administration imposed differing levels of tariffs on the above products as part of its four-year review of tariffs under Section 301 of the Trade Act of 1974 that were imposed earlier on a range of Chinese products. It announced that based on the existing Section 301 tariffs, the US will further increase tariffs on electric vehicles, lithium batteries, photovoltaic cells, key minerals, semiconductors, steel and aluminum, port cranes, personal protective equipment, and other products imported from China. The 100% tariffs will apply to EVs. The White House claimed that the action against Chinese EVs, lithium batteries, photovoltaic cells, and semiconductors among others were “carefully targeted as strategic sectors”. The latest action by the Biden administration will cover US$18 billion worth of Chinese products. In a long statement, the US claimed that “today’s actions to counter China’s unfair trade practices are carefully targeted at strategic sectors – the same sectors where the United States is making historic investments under President Biden to create and sustain good-paying jobs – unlike recent proposals by Congressional Republicans that would threaten jobs and raise costs across the board.” The Biden administration maintained that “the previous administration’s trade deal with China failed to increase American exports or boost American manufacturing as it had promised.” According to the statement, the US “will continue to work with our partners around the world to strengthen cooperation to address shared concerns about China’s unfair practices – rather than undermining our alliances or applying indiscriminate 10 percent tariffs that raise prices on all imports from all countries, regardless of whether they are engaged in unfair trade.” VARYING LEVELS OF TARIFF HIKES According to the statement, after an in-depth review by the United States Trade Representative, “President Biden is taking action to protect American workers and American companies from China’s unfair trade practices.” “To eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products.” On steel and aluminium, according to the statement, “the tariff rate on certain steel and aluminum products under Section 301 will increase from 0-7.5% to 25% in 2024.” On semiconductors, the tariff rate will increase from 25% to 50% by 2025. The Biden Administration has already set aside US$53 billion for the development of the semiconductor sector under the CHIPS Act. Notwithstanding the “green” subsidy policies, the US will increase the tariff rate on electric vehicles under Section 301 from 25% to 100% in 2024. It said that the “tariff rate on lithium-ion EV batteries will increase from 7.5% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. The tariff rate on battery parts will increase from 7.5% to 25% in 2024.” Further, the tariff rate on natural graphite and permanent magnets will increase from zero to 25% in 2026, while the tariff rate for certain other critical minerals will increase from zero to 25% in 2024. The tariff rate on solar cells will increase from the existing level of 25% to 50% in 2024. On “ship-to-shore cranes”, the tariff rate on imports from China will increase from 0% to 25% in 2024. “A 25% tariff rate on ship-to-shore cranes will help protect US manufacturers from China’s unfair trade practices that have led to excessive concentration in the market,” the US said. Lastly, on medical products, the tariff rates on imports from China of “syringes and needles will increase from 0% to 50% in 2024.” For certain personal protective equipment (PPE), including certain respirators and face masks, the tariff rates will increase from 0-7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026. In an apparent race to match President Biden’s latest tariff hikes, Donald Trump, his rival in the upcoming US presidential elections, announced that he “will put a 200% tax on every car that comes in from those plants,” in reference to Chinese vehicles made in Mexico, according to a report in the Wall Street Journal (WSJ). “The retort put on display a dynamic now at the heart of US trade policy: The leaders of both political parties are racing each other to impose tough barriers on trade with China. What was once a lone effort by Trump to disrupt the bipartisan faith in free trade has become an establishment consensus of its own,” the WSJ maintained. CHINA HITS BACK China hit back against the latest US tariff hikes, saying that “out of domestic political considerations, the US has abused the 301 tariff review process, further increased the 301 tariffs on some Chinese products, and politicized and instrumentalized economic and trade issues, which is a typical political manipulation. China expresses strong dissatisfaction with this.” China said the “WTO has already ruled that 301 tariffs violate WTO rules. Instead of correcting it, the US has stuck to its course and made repeated mistakes.” According to China’s commerce ministry, “the increase of 301 tariffs by the US side violates President Biden’s commitment of “not seeking to suppress or contain China’s development” or “not seeking to decouple and break the chain” from China, and is also not in line with the spirit of consensus reached by the two heads of state, which will seriously affect the atmosphere of bilateral cooperation.” The Chinese commerce ministry said that “the US side should immediately correct its wrong actions and cancel the additional tariff measures against China. China will take resolute measures to safeguard its own rights and interests.” However, there is not going to be any easy and prompt resolution of this issue at the WTO as the enforcement function of the trade body has been made dysfunctional for the past six years after the US repeatedly blocked since December 2019 the filling of vacancies on the Appellate Body, the highest adjudicating body at the WTO for resolving global trade disputes. +
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