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US-China relations: Beijing could face double threat from tariffs and Indo-Pacific pact

08/07/2022    54

Economist Zhong Zhengsheng says the US might use tariffs in concert with the IPEF economic framework to restrict China’s economy

Though analysts expect the removal of some US tariffs on Chinese goods, that could be coupled with a new probe into industrial subsidies

China should brace for a scenario where the US leverages both tariffs and the new Indo-Pacific Economic Framework (IPEF) to contain the country, according to a Chinese expert, despite talk of an imminent tariff rollback.

US President Joe Biden has been mulling the possible removal of some tariffs on Chinese imports in a bid to help curb soaring inflation in America, and there are reports that a decision could come as soon as this week.

Zhong Zhengsheng, chief economist at Ping An securities, said tariffs could still be used by Washington as a bargaining chip in the trade relations with Beijing, especially as inflation expectations were falling in the US.

Furthermore, the Biden administration might use tariff measures in concert with the IPEF economic framework to squeeze China’s economy, he said.

“We need to keep an eye on this … the US might use [tariffs and the IPEF] at once and attach importance to both,” he said at a webinar held by the think-tank China Macroeconomy Forum on Wednesday.

On Tuesday, China’s top trade negotiator Liu He and US Treasury Secretary Janet Yellen had a long-awaited meeting that appeared to be a step toward a widely anticipated rollback of punitive tariffs on some Chinese products, four years after being put into place.

The White House said afterwards the Biden administration is looking at options on whether to cut tariffs on Chinese imports to ease inflation.

“There are a lot of different elements to this, especially since the previous administration imposed these tariffs in such a haphazard way, in a non-strategic way,” said White House press secretary Karine Jean-Pierre.

“So we want to make sure that we have the right approach. And again, his team is talking, is figuring it out, and they’re talking through this.”

Source: South China Morning Post