The United States is adopting a methodical approach to its evaluation of whether to retain tariffs on Chinese goods, and the decision will not be contingent on any “breakthrough” in U.S.-China trade relations, according to Deputy U.S. Trade Representative Sarah Bianchi.
During an interview on Saturday, Bianchi stated that the Biden administration is not presuming that such a breakthrough will occur, but it will maintain an ongoing dialogue with China at various levels. Her remarks came as a ministerial meeting of the U.S.-led Indo Pacific Economic Framework talks concluded.
“We are leading the appraisal from an investigative perspective. We’re not assuming any breakthrough in the trade relationship with China as part of the review,” Bianchi explained. “We’re not assuming that that will happen.”
Instead, the U.S. Trade Representative (USTR) is presently assessing industry and stakeholder input regarding the tariffs, alongside consultations with the U.S. Commerce Department, the Treasury, and other relevant agencies, to identify the categories of goods that hold strategic significance, Bianchi explained.
“We are carefully considering what makes economic sense,” stated Bianchi, who is responsible for overseeing USTR’s involvement in Asia.
The tariffs were initially imposed by former U.S. President Donald Trump in 2018 and 2019, targeting a broad array of Chinese imports valued at around $370 billion during that period. The decision came after a “Section 301” investigation concluded that China was engaging in the misappropriation of U.S. intellectual property and pressuring U.S. companies to transfer sensitive technology.
Currently, the duties vary from 7.5% on many consumer goods to 25% on vehicles, industrial components, semiconductors, and other electronics. Notably, certain major categories such as cell phones, laptop computers, and videogame consoles were excluded from the tariffs.
The review, mandated by Section 301 of the Trade Act of 1974, began four years after the initial imposition of the tariffs and commenced with preliminary notification steps in May 2022.
Bianchi did not disclose when the review is expected to be completed but stated that it would be “reasonable” to conclude it by the end of 2023.
USTR extended tariff exclusions on 352 import categories from China until the end of September 2023.
Some experts in Washington view this date as a potential decision point in the tariff review.
As the review commenced in May, some officials within the Biden administration advocated for the removal of some tariffs as the administration grappled with high inflation. U.S. Treasury Secretary Janet Yellen suggested that eliminating “non-strategic” tariffs would reduce costs for specific goods, while Trade Representative Katherine Tai argued that the duties provide “significant leverage” over China.
Bianchi mentioned that discussions regarding the tariffs in relation to inflation have diminished as inflationary pressures have eased.
During a meeting with Tai in Detroit, Chinese Commerce Minister Wang Wentao raised objections to the Section 301 tariffs, expressing concern. This meeting, along with a prior meeting between Wang, Tai, and Commerce Secretary Gina Raimondo, marked the first cabinet-level exchanges between the U.S. and China in months, amidst a series of trade and national security challenges, including the U.S. interception of a Chinese spy balloon that traveled across the continental U.S.
Bianchi emphasized the importance of maintaining a healthy dialogue between the U.S. and China for the global economy, even in the face of disagreements.
“These are the two largest economies in the world, and we need to be engaged in discussions at various levels, even if they are difficult conversations,” she stated.
She continued that, on trade currently, there isn’t much areas of agreement in the middle of the U.S. and China. It’s uncertain where it will lead, but it’s possible conversations will continue, albeit difficult.
