The U.S. Trade Representative's upcoming decision on modifying tariffs against China has sparked significant concern among economists, trade groups, and international organizations. As the Office of the U.S. Trade Representative (USTR) prepares to finalize its stance under Section 301, many warn that additional tariffs could negatively impact American businesses and consumers.
On May 14, USTR Katherine Tai announced that President Joe Biden has directed her to take further action on China tariffs following a four-year review under Section 301. The proposed changes include increasing tariffs on strategic sectors such as batteries, electric vehicles, semiconductors, steel, and aluminum products.
In response to these proposals, the U.S.-China Business Council (USCBC), representing over 270 American companies operating in China, expressed disappointment. "Maintenance of the prior tariffs – with no reductions – and imposition of additional tariffs ultimately make it harder for American companies to compete in the U.S. and abroad, cost American jobs, and increase prices for U.S. manufacturers and consumers during a time of ongoing inflation," stated USCBC President Craig Allen.
Economists like Jeffrey Sachs from Columbia University argue that the new tariffs violate World Trade Organization commitments, harm consumers, and escalate geopolitical tensions. Similarly, William Alan Reinsch from the Center for Strategic and International Studies highlighted that these tariffs could hinder the green transition by making essential products like solar cells and batteries more expensive.
Gary Clyde Hufbauer of the Peterson Institute for International Economics believes that the USTR is unlikely to make significant changes to the proposed tariffs, suggesting that political motivations outweigh economic considerations. The International Monetary Fund (IMF) also cautioned against the intensification of trade restrictions, emphasizing that such measures distort trade flows and undermine global supply chains.
Businesses and industry leaders echo these sentiments, noting that increased input costs and higher prices could reduce competitiveness and contribute to inflation. Thomas Rosensweet of Newport Metals, LLC, highlighted that tariffs could act as a tax on American users, driving costs higher without delivering the intended trade benefits.
As the USTR reviews public comments, the final decision on tariffs remains a critical issue for the U.S. economy, with potential widespread implications for trade relations and domestic markets.
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U.S. economists, trade groups voice concern over tariffs against China
cgtn.com
