US says it will fight ‘distortions’ caused by China’s economy
Washington, US - The US said it will combat the ‘distortions’ to the world economy created by China’s economic system, especially in markets for steel and aluminium.
In a report to Congress, the US Trade Representative’s (USTR) office said its primary goal is to defend the government’s ability to impose duties on China for dumping goods at artificially low prices or unfairly subsidising Chinese firms. China’s economic system, which doesn’t operate based on market principles, is hurting American workers and industries, USTR said in a report on its enforcement priorities to the
Senate finance and house ways and means committees.
‘The international steel and aluminium markets, for example, are currently experiencing significant oversupply due in large part to production from excessive and uneconomic capacity in China’, USTR said in the report, which was dated July 2017 and obtained by Bloomberg News.
‘This oversupply has caused severe market distortions, including the suppression of US and global prices, and the displacement of US exports in foreign markets’.
The tough message on China follows a tense meeting in Washington between senior economic officials from the world’s two biggest economies who failed to agree on trade issues.
The Commerce Department has been investigating whether steel and aluminium imports represent a threat to national security, though President Donald Trump suggested last week a decision on steel isn’t imminent.
The Chinese government disputes the US position that China doesn’t operate as a ‘market economy’. Designating China a ‘non-market economy’ enables the US to impose higher duties in retaliation for dumping and unfair subsidies.
In its report, the USTR said it will continue to prioritise enforcement efforts in countries where intellectual-property (IP) protection ‘has deteriorated or remained at unacceptable levels’.
The report accuses China of ‘widespread infringing activity, including trade secret theft, rampant online piracy and counterfeiting’.
It notes that India and Indonesia are on the US ‘priority watch list’ for IP violations.
The Chinese government disputes the US position that China doesn’t operate as a ‘market economy’