Removing additional tariffs on Chinese goods will significantly ease the pressure on companies in both China and the United States, and help the world to curb inflation, experts said. Their remarks followed the Office of the United States Trade Representative 's announcement of a statutory four-year review of the continuation of the U.S. “Section 301” tariffs on Chinese products. The USTR will examine the tariffs on Chinese products from July 6, 2018 to August 23, 2018. Based on this review, the U.S. government can determine whether to maintain the tariffs, change the tariff rates, or remove the tariffs.
In the first quarter of this year, China-U.S. trade grew 12% year-on-year to USD185.92 billion, according to China’s General Administration of Customs. According to Tu Xinquan, Dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, the additional U.S. tariffs on Chinese products have put heavy burdens on U.S. companies and aggravated inflation in the country. In the U.S., many businesses have been seeking rollbacks of the additional tariffs on Chinese products, as many of the tariffs were levied through administrative orders rather than being based on relevant laws. This led to a series of complaints and lawsuits that challenged the authority of those orders issued by the former administration.
In the two-step review process, the first step is for the USTR to offer an opportunity for U.S. domestic industries that benefited from the tariffs to request their continuation. Legally, the tariffs are to terminate four years after their application, if no U.S. party submits a request that they be continued. If there are requests to continue, the USTR is to undertake a review of the effectiveness of the “Section 301” tariffs on achieving their objectives and their impact on the U.S. economy and consumers.
Cancelling the additional tariffs on Chinese products will also help many parts of the world to curb inflation, because stable product and commodity supplies from China and the U.S. – the world’s two largest economies – will facilitate the world to build strong industrial and supply chains, said Zhang Yongjun, Deputy Chief Economist at the China Center for International Economic Exchanges. Amid global inflation and growing pressures on the global supply chain, tariffs have become an inconvenient factor that inhibits enterprises from conducting international trade cooperation, said Zhou Mi, Senior Researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
China and the U.S., he said, should not only remove additional tariffs imposed during their trade disputes, but even further reduce tariffs to make them even lower than the pre-dispute levels. That will significantly boost expectations of normal global supply chain operations, bolster market confidence and facilitate global economic recovery. “As the world’s two largest economies, healthy bilateral relations between China and the U.S. are important not only to them but the world, as the global economy has been facing a number of uncertainties in recent years,” he said. Woody Guo, President for China at Herbalife Nutrition, a U.S.-based manufacturer of nutrition products, said it is beneficial for China and the U.S. to enhance their ties in the area of trade and economic cooperation. “In China, consumption upgrade and domestic demand expansion will help the country to grow its consumer base under the dual-circulation development paradigm, providing huge growth potential for foreign enterprises, including Herbalife Nutrition,” Guo said, as reported by the China Daily.