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September 3, 2019

New U.S. Tariffs On Chinese Products Take Effect As China Takes Cooperative Stance

The week before the Labor Day holiday in the United States brought a relative respite from further escalation in the trade conflict between China and the United States. Bloomberg reported the Chinese government would not immediately retaliate against the tariff increase that President Donald Trump announced in August (see the Connecting the Dots story here for details on that announcement).

In remarks to the media in Beijing Ministry of Commerce spokesman Gao Feng said, “China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war … China is lodging solemn representations with the U.S. on the matter.”

The United States, meanwhile, began collecting new 15 percent tariffs on Sunday on billions worth of Chinese products. (Click here to read the Connecting the Dots story that explains the products contained in this batch of goods.) Despite moving forward with those penalties, over the weekend, according to Reuters, Trump administration officials said negotiators from the United States and China would talk by phone and in person this month about stalled negotiations regarding a new trade pact. The officials did not offer specific dates for those discussions, however.

The media over the last few weeks has increased its focus on how the trade penalties are affecting U.S. consumers and businesses. (The Wall Street Journal reported last week that more than 80 percent of U.S. companies surveyed by the U.S.-China Business Council said they have been impacted by trade tensions with China this year. Almost 40 percent said their sales have suffered.)

Perhaps as a result, White House officials said last week that President Trump will consider a proposal offered by Sen. Rick Scott (R-Fla.) that would cut taxes by the amount raised from the tariffs imposed on China. The Washington Post has more on this idea, which has not yet been formally proposed in the U.S. Congress. Stay tuned to Connecting the Dots for more on Congress’ reaction to the trade battle.

In related news, as FastmarketsAMM (subscription required) reported, the U.S. government announced recently that it has decided to keep in place anti-dumping duties on imports of light-walled rectangular pipe and tube from China, Mexico, South Korea and Turkey. The Department of Commerce found that revoking the duties “would be likely to lead to continuation or recurrence of dumping.”

Dumping margins as high as 255.07 percent will remain in place on imports from China while imports from Turkey, South Korea and Mexico still will face penalties up to 41.71 percent, 30.66 percent and 11.5 percent, respectively.