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September 11, 2021

China tariff policies flounder without a strategy

By Van Jackson

The White House is close to announcing investigations into Chinese use of industrial subsidies, the prelude to imposition of tariffs. The probes are known as “301s”, the section of US trade law that allows them.

If you import stuff from China that gets classified as requiring Section 301 import duties, you’ll have to pay that extra margin, which means US importers must either bear the costs on to consumers. They can appeal to the Court of International Trade for a refund, which then burdens the taxpayer and incurs administrative costs.

Rather than dodging strategy in favor of endless crisis management, the White House ought to be asking a series of questions. What problem are we responding to? What are we trying to achieve? How will 301s and tariffs further that?

Former president Donald Trump used tariffs extensively as the main tool of his “trade war” with China and it achieved nothing other than the imposition of reciprocal tariffs from China. President Biden shares some of this economic nationalist sensibility, calling tariffs “the greatest negotiating tool in the history of our country.”

Maybe that’s true. But no tool does everything, and a tool’s value has to be judged against its purpose in context. So what’s the purpose behind wielding tariffs against China?

Read the full article from Asia Times.

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