US trade war with China deepens as Trump refuses to reduce medical supply tariffs

27/03/2020    28

THE TRUMP administration is said to be trying to avoid reducing tariffs on medical imports from China amid the coronavirus pandemic.

In December, President Donald Trump agreed to a phase one agreement after a trade war with China. But according to former officials and analysts, the President’s concern was that emergency adjustments could undermine their position as Beijing’s contenders, which could give Trump a boost in the November elections.

Vanessa Sciarra, vice-president of trade and investment policy with the National Foreign Trade Council, said: “There will be inexorable pressure to relax the tariffs. But the administration is going to hold the line as long as they possibly can because they see this is so fundamental to their trade policy,

“There’s a lot of internal debate that you can’t give China something for nothing and how to go forward.”

In the December agreement, Trump advocated for a policy for settling disagreements that is “supposed to hold a stick over the Chinese,” she added.

“It undermines his whole plan if the US starts unilaterally undercutting the agreement.”

After claiming for weeks that the coronavirus was not a serious threat, President Trump has been compelled to make concessions on Chinese medical imports that were added to the Federal Register.

On March 10 and 12, the administration momentarily removed the tariffs on protective clothing including gloves and medical goggles.

On Friday night, The Office of the US Trade Representative (USTR) introduced a feedback channel for medical provision importers that think tariffs should be relieved, saying : “This comment process does not replace the current exclusion process.”

Detractors agree that the levies should be slashed quickly. Chad Bown, an economist with the Peterson Institute for International Economics (PIIE), said: “If your strategy is to cut yourself off from China, which is the largest supplier of medical equipment, at this time of greatest need, that’s a big problem”.

Top officials in the Trump administration and Congress see the global crisis as a chance to debilitate international ties with China, decrease global trade movements and bestow blame on Beijing.

Recently, various Republican senators have proposed laws that aim to reduce America’s dependence on China.

Detractors warn that applying high tariffs on Chinese medical supplies could have implications beyond the trade codes and potentially cost hundreds of lives.

Chad Brown added that insufficient US organisation “is a bit more self-inflicted because of the trade war,

“We put tariffs on all of those products.”

The March reductions excluded levies on few imported Chinese medical supplies.

US$1.1 billion of goods that could result helpful in battling the coronavirus are still under a 25 percent tariff.

“The US, I believe, was justified in adopting a much more aggressive policy toward China,” said Clete Willems, a partner in Washington with the law firm Akin Gump.

“But my worry is that we’re going too far,” he added. “Global problems require global solutions”

Ohio-based manufacturer Gojo industries is in dire demand as it produces dispenser for the Purell hand sanitiser, a key product to avoid spreading the virus.

Although the dispensers are made in the US, two of its main components are imported from China.

Nicole Bivens Collinson, head of international trade and government relations at the law firm representing Gojo, said: “They may be manufactured in the US, but it’s a global supply chain,

“We asked for an exemption. They denied it. This is for friggin’ hand sanitiser.”

Before the US-China trade war, American tariffs on around US$22 billion in imported medical supplies ranged from zero to under 8 percent.

Source: Express UK