The China Council for the Promotion of International Trade (CCPIT) announced it will take legal action to defend Chinese shipbuilding, logistics and maritime companies affected by the latest U.S. Section 301 investigations, calling the trade probes “unreasonable” and “discriminatory”. The CCPIT will “arrange for companies from the upstream and downstream supply chains to attend the hearings in the U.S. in order to legally defend the rights of Chinese companies,” a CCPIT Spokesman said. Section 301 investigations aim to determine whether a foreign government’s policies or acts are discriminatory, and whether they burden or restrict U.S. commerce. A White House fact sheet on the launch of the investigations cited “growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, were distorting the global shipbuilding market and eroding competition”. The downturn in the U.S. shipping industry was due to its own “lack of competitiveness” and had nothing to do with China, the CCPIT Spokesman said.
Separately, U.S. President Joe Biden last week called for tripling tariffs on Chinese steel and aluminum from 7.5% to 22.5%, as the U.S. Trade Representative’s (USTR) office announced the launch of the Section 301 probes under the Trade Act of 1974. The Chinese Ministry of Commerce (MOFCOM) said it was “strongly dissatisfied with and firmly opposed” the U.S. move. It also called the accusations “false” and “entirely untenable”. The CCPIT has yet to specify what kind of legal action it plans to take, but it has submitted legal defense documents in U.S. trade investigation hearings against Chinese goods in the past. If the investigation determines that foreign practices have unfairly affected US commerce, the USTR may take “appropriate and feasible action”, including imposing duties and other import restrictions such as fees, a White House statement said. The USTR was seeking public comments and would hold a public hearing.
The latest U.S.-China trade conflict comes days ahead of a visit to Beijing by Secretary of State Antony Blinken. During his three-day trip starting on April 24, Blinken is expected to meet Chinese counterpart Wang Yi on a “range of bilateral, regional and global issues”, including what the U.S. has called “unfair trade practices and industrial overcapacity”. U.S. Trade Representative Katherine Tai has said that a tariff review on more than USD300 billion in Chinese imports inherited from the Trump Administration will conclude “soon”. Biden had kept the tariffs in place and been looking at ways to make them more strategic and effective, Tai told Bloomberg in an interview.
Biden’s call on raising tariffs on steel came as part of his re-election campaign in the swing state of Pennsylvania. Chinese companies are “not competing. They’re cheatin, and we’ve seen the damage here in America”, Biden told a crowd of steelworkers at United Steelworkers Union headquarters in Pittsburgh. He also pledged to never allow a repeat of the thousands of job losses in the sector between 2000 and 2010, when “Chinese steel began flooding the market”, the South China Morning Post reports.
The Global Times quotes Chinese analysts saying that the Section 301 probe is illegal, unilateral and invalid, and China will take countermeasures. He Weiwen, Senior Fellow at the Center for China and Globalization, said the Section 301 investigation is not included in the WTO framework. He noted that WTO members have no right to determine if any other member violates regulations, and only the organization itself can make the ruling. China's maritime, logistics and shipbuilding sectors have actively conducted technological innovation and participated in free market competition based on market development needs, which significantly contributed to the development of global trade as well as the smooth and stable operation of global supply chains, a CCPIT Spokesperson said in a statement posted on its official WeChat account.
Related U.S. research showed that the predicament of the US maritime, logistics and shipbuilding sectors was mainly caused by a lack of market competitiveness. The CCPIT and the China Chamber of International Commerce, on behalf of China's business community, urged the U.S. to respect market rules and the principle of fair competition, immediately stop making the wrong moves, and return to the multilateral trade system based on market rules and principles. The USTR initiated the probe after five U.S. labor unions filed a petition alleging that China is using “unfair, non-market policies and practices” to dominate the maritime, logistics and shipbuilding sectors.
“According to a WTO ruling, the former U.S. Administration was wrong to impose additional steel and aluminum tariffs on certain WTO members and launch a Section 301 investigation and raise tariffs on China. Instead of correcting its mistake, the U.S. chose to double down on it by threatening new tariff hikes and announcing a new Section 301 investigation," Chinese Foreign Ministry Spokesperson Lin Jian said, urging the U.S. to be prudent in its words and deeds, and stop manipulating issues related to China in the election year.
