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American Shipper

White House moving forward with China tariffs

The announcement comes a little over a week after the U.S. Treasury chief said the measures were on hold for the time being and before the U.S. Commerce chief is set to visit Beijing.

   The Trump administration plans to move forward in imposing 25 percent tariffs on approximately $50 billion worth of goods in yearly import value from China, the White House announced Tuesday, just over one week after putting its tariff proposal on hold.
   The tariffs are expected to apply to “industrially significant technology” imports from China, including those related to the “Made in China 2025” program, and will be announced by June 15, with tariffs taking effect “shortly thereafter,” according to the White House statement.
   Commerce Secretary Wilbur Ross is scheduled to meet with Chinese officials in Beijing on Saturday to discuss bilateral trade matters, after a Chinese delegation visit to Washington May 17-18 ended with the U.S. temporarily dropping its tariff threat, as stated by Treasury Secretary Steven Mnuchin on cable news.
   A White House statement following that meeting also indicated that those talks ended with “consensus” on effective measures to reduce the U.S. goods trade deficit with China, including “meaningful increases” in U.S. agriculture and energy exports to the nation.
   China also on May 22 announced plans to cut automotive tariffs from 25 percent to 15 percent.
   In addition to the planned imposition of tariffs following an investigation of China’s business practices under Section 301 of the Trade Act of 1974 completed by the executive branch in March, the U.S. plans to implement “enhanced export controls” and “specific investment restrictions” related to China’s acquisition of “industrially significant technology,” the White House Tuesday statement says.
   Those measures will be announced by June 30 and implemented “shortly thereafter,” the White House said.
   Finally, the United States will continue to pursue World Trade Organization (WTO) litigation for violations of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) based on China’s discriminatory intellectual property licensing practices, after the U.S. filed a WTO case regarding the violations on March 23, the White House said.
   “The United States will request that tariffs and taxes between the two countries be reciprocal in nature and value,” the statement says. “Discussions with China will continue on these topics, and the United States looks forward to resolving long-standing structural issues and expanding our exports by eliminating China’s severe import restrictions.”
   An English-language response by the Chinese government to the announced tariffs was not available as of press time.
   USTR on April 3 released a list of proposed tariffs to cover approximately 1,300 tariff lines of Chinese products; then China one day later announced its intent to retaliate with 25 percent tariffs on 106 U.S. exports worth about $50 billion in 2017.
   The Trump administration held a public hearing at the International Trade Commission in Washington May 15-17, when it heard testimony from several industry representatives about whether the proposed Section 301 tariffs should be implemented.
   The “enhanced export controls” referenced in the White House’s Tuesday statement could at least partly be associated with an apparent U.S. government deal with China to put Chinese telecommunications company ZTE back in business, originally reported by Reuters on Friday.
   The story cited a “senior congressional aide” as stating that the reported deal requires ZTE, which sources some of its phones’ components from U.S. companies, including Qualcomm, to pay a “substantial fine,” place U.S. compliance officers at the company and change its management team.
   After that, the Commerce Department would reportedly lift an order in place since April prohibiting U.S. entities from exporting to ZTE.
   A statement by President Donald Trump — via tweet on May 13 — that his administration and the Chinese government were working to get ZTE back in business, provoked counteraction on Capitol Hill as several GOP senators joined Democrat counterparts last week in approving a measure pitched by Sen. Chris Van Hollen, D-Md., to block Trump from easing sanctions against ZTE.
   The Senate Banking Committee OK’d the amendment to the Foreign Investment Risk Review Modernization Act (FIRRMA) on May 22.
   To be sure, FIRRMA must still pass the Senate and House, and be signed by the President, before the measure would require Trump to take any action.
   The White House didn’t comment on the reported bilateral deal regarding ZTE.
   But Trump touched on the deal in a Friday afternoon tweet.
   He said: “I closed it down then let it reopen with high-level security guarantees,
change of management and board, must purchase U.S. parts and pay a $1.3 Billion fine.”

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