US tariffs on China give negotiating leverage: Trade chief

WASHINGTON • US tariffs on more than US$300 billion (S$417.1 billion) in annual imports from China provide significant leverage and are useful from a negotiating standpoint, President Joe Biden's trade chief said amid a debate within his administration on whether to keep the duties in place.

"The China tariffs are, in my view, a significant piece of leverage, and a trade negotiator never walks away from leverage," United States Trade Representative Katherine Tai said at a Senate hearing on Wednesday in response to a question about whether removing the duties would encourage "more bad behaviour" by Beijing.

The comments come after Mr Biden on Saturday said he was in the process of making up his mind on whether to remove any of the duties. They were first imposed by then President Donald Trump starting in 2018 to pressure China to end intellectual-property abuses and forced technology transfer.

Ms Tai also said there was "a limit to what we can do" to ease inflation through tariff changes.

Her remarks contrast with those of US Treasury Secretary Janet Yellen, who said earlier this month the tariffs have hurt US consumers and businesses and are contributing to the fastest inflation in 40 years. Reductions in the duties could help bring down prices, she said, while acknowledging that cuts are not a panacea for addressing inflation. The Biden administration was looking to reconfigure the tariffs, she said.

Commerce Secretary Gina Raimondo also said this month that it "may make sense" to lift tariffs on some goods to tame inflation.

Ms Tai said the US must use all available tools and develop new ones to defend its economic interests and values against China's practices, after talks showed clear limits to Beijing's willingness to live up to past commitments.

"This has become part of a pattern," Ms Tai said. "The United States has repeatedly sought and obtained commitments from China, only to find that lasting change remains elusive."

The US now needed to turn the page on the old playbook, she said, repeating previous comments.

The US has brought a renewed focus to engaging with partners and allies who are hurt by China's trade and economic practices, Ms Tai said.

Mr Biden recognised that the US needed to work with other countries to confront policies that "are fundamentally at odds with the modern global trading system".

Asked yesterday about Mr Biden's remarks on the tariffs and the possibility they could be revisited, China's Commerce Ministry repeated its call for the US to remove levies imposed on Chinese goods.

"Given the current high inflation situation, the sooner the US lifts its tariffs on China, the sooner consumers and businesses will benefit," ministry spokesman Shu Jueting told reporters. Beijing and Washington fought a trade war from 2018 to early 2020, when they called a truce after China made commitments to increase imports from the US over the next two years and address intellectual-property concerns.

Still, the US kept in place tariffs on more than US$300 billion in annual imports, and China's buying fell short of its purchasing commitments.

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A version of this article appeared in the print edition of The Straits Times on June 24, 2022, with the headline US tariffs on China give negotiating leverage: Trade chief. Subscribe