Trade war: US looking at lifting tariffs on Chinese goods, American officials say

  • Office of US Trade Representative announces a required procedure, four years after the first tariffs were imposed by then-president Donald Trump
  • Businesses that want the tariffs to continue are told to notify the office

Washington’s trade office told US businesses on Tuesday that it had begun a statutory process that could ultimately end up removing tariffs on Chinese goods.

The notification, part of a legal requirement to review the tariffs four years after they were first put into place, puts the burden on US businesses benefiting from those tariffs to speak out and say that they want the policy to continue, the office of the US Trade Representative (USTR) said.

“The office of the US Trade Representative is today commencing the statutory process required leading up to the four-year anniversaries of the tariff actions,” the announcement said.

“If a request for continuation is received, USTR will conduct a review of the tariff actions,” it said.

The office of US Trade Representative Katherine Tai announced the start of a required process concerning the tariffs on Chinese goods. Photo: AFP

The procedural step comes amid an intense debate in Washington over the tariffs, first imposed by then-president Donald Trump in 2018 and maintained so far by Joe Biden 16 months into his presidency.

It is the first step in what could be a months-long process.

Under the policy, businesses will have until July 6 – the four-year anniversary of the first tariffs – to notify the USTR that they want them kept in place.

That would then trigger a review from the trade office, which would include a period for the public to provide comments.

The announcement also comes as Biden faces urgent pressure to halt rising inflation – and a growing chorus of officials in his administration have suggested in recent weeks that lifting at least some tariffs might help address that issue.

There may still be some disagreement, however. In particular, US Trade Representative Katherine Tai expressed scepticism this week about how much of an effect removing tariffs would have on inflation in the US.

A paper by the Peterson Institute for International Economics said that lifting tariffs on a range of imports from China and elsewhere could shrink inflation by 1.3 percentage points.

“I really have to challenge the premise of that study,” Tai said on Monday about the paper. “I think it’s either something between fiction or an interesting academic exercise.”

The question of tariffs is also being debated on Capitol Hill, as part of the massive China competition bill making its way through Congress.

The US and China have placed tariffs on billions of dollars of each other’s goods since 2018 – a back-and-forth that began when the Trump administration wanted to penalise Beijing for what it said were unfair trade practices, including intellectual property theft.

US lawmakers have split over whether to lift the tariffs to help keep consumer costs low, or whether to keep them in place to help American manufacturers compete.

Tai told Senate Democrats last week that she did not endorse a Senate plan that would force the administration to begin a process for widespread tariff exclusions, according to the trade industry publication World Trade Online.

A poll last month found that 71 per cent of registered US voters support continuing tariffs on China. The poll was conducted by Morning Consult on behalf of the Coalition for a Prosperous America, a group that advocates for US manufacturers and supports the tariffs.

Author: Jacob Fromer, SCMP

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