China urges US to drop Trump-era tariffs

Analysts say issue tied more to Washington’s need to tame inflation than trade frictions

Beijing has urged the administration of US President Joe Biden to remove tariffs on Chinese products imposed by his predecessor, Donald Trump, amid growing discourse in Washington over ways to tame soaring inflation.

Biden said on Tuesday he could drop some of the tariffs, while repeatedly blaming the coronavirus pandemic and Russia’s invasion of Ukraine for rising costs.

Ministry of Foreign Affairs spokesman Zhao Lijian said on Wednesday US exports to China since the trade war started in 2018 had dropped below the pre-war level and the United States lost more than 240,000 jobs during the period.

“The data indicates that the trade war does nobody any good. It is time for the US government to reconsider and remove the tariffs as soon as possible,” Zhao said.

“There is no winner in a trade war or tariff war. The US’ unilateral tariffs imposed against China do not help us. Nor do they benefit the US or the world.”

Last week, US Trade Representative (USTR) Katherine Tai said her agency had started the expiry review of Section 301 tariffs of up to 25 per cent on Chinese products, with the first round to cover US$50 billion worth of Chinese products from July, when the tariffs will expire.

Consumer prices in the US rose by 8.3 per cent in April, easing from March’s four-decade-high gain of 8.5 per cent but still around the fastest rate since the 1980s.

“The US administration wanted to use the tariffs as leverage in bargaining with China, but the tariffs became useless and backfired on the US economy,” said Lu Xiang, a researcher on US issues with the Chinese Academy of Social Sciences.

It would be a top priority for the US to address inflation in the coming months, and the removal of tariffs should be seriously considered to ease the burden on the economy and consumers, Lu said.

Plenum, an independent research firm based in Beijing, said the review was the strongest indicator of the USTR’s openness to reducing some tariffs, though not on a large scale.

“The tariff mechanism is likely to stay without any major rollbacks,” said Bo Zhengyuan, a partner with Plenum.

“But we still contend that the USTR will keep the Section 301 tariff mechanism, and only adjust the scope by expanding exclusion based on the results of the review and the state of the bilateral relationship.

“Tariff adjustments are no longer tied to trade negotiations between the US and China like during the Trump administration. The USTR’s willingness to adjust the tariff scope stems from economic and political demands at home.”