By Zhong Sheng, On top of existing tariffs under Section 301, the U.S. recently decided to raise additional tariffs on its imports of Chinese products including electric vehicles (EVs), as part of its ongoing abuse of the Section 301 tariff review procedure driven by domestic political concerns.
The U.S. has unilaterally politicized economic and trade issues and used them as a tool, wielding the stick of tariffs to suppress China’s industrial development and normal economic and technological activities. This not only seriously violates the principles of market economy and international trade rules but also poses a grave threat to the healthy development of the global economy.
The imposition of additional tariffs by the U.S. is a typical act of unilateralism and protectionism.
The U.S. claimed that Chinese products had threatened its “national security” and accused China of engaging in “unfair trade practices,” but all these are baseless excuses. The main purpose of the U.S. imposing additional tariffs on Chinese products is to exploit political gains under the guise of protecting relevant industries.
As pointed out by Clark Packard, a research fellow at the Cato Institute, new tariffs on imported EVs and other products from China are driven mostly by domestic political calculations in the run-up to the 2024 presidential election. It’s truly a race to the protectionist bottom.
The high tariff barriers set by the U.S. impede free trade and undermine fair competition. Such an approach does not protect U.S. industries but rather makes them increasingly uncompetitive in a comfortable environment.
Stephen Roach, a senior fellow at Yale University, pointed out that the allegations in the U.S.-initiated Section 301 investigation against China lack evidence, and its attempt to curb China’s industrial development through tariffs is short-sighted and cannot achieve the long-term goal of revitalizing U.S. industries.
The imposition of additional tariffs by the U.S. is a typical act of hegemony and bullying.
The previous U.S. administration’s imposition of tariffs on Chinese products under Section 301 has severely disrupted normal economic and trade exchanges between the two countries and was ruled by the World Trade Organization (WTO) as a violation of WTO regulations.
Instead of correcting its actions, the U.S. has once again imposed tariffs, which demonstrates that certain people in the country are suffering from a chronic case of “China anxiety.” Trying to maintain the U.S. hegemony, they perceive China’s development as a threat and resort to all means to suppress China, irrationally.
The development of China’s new energy industry is the result of technological innovation by Chinese companies and their active participation in market competition. It benefits from China’s complete industrial categories, industrial system, and huge domestic market. It is in line with the needs of global economic development and benefits not just China but also the U.S. and the whole world.
The U.S. resorting to all means to unscrupulously suppress China’s new energy sectors does not prove its strength but rather exposes its lack of confidence. It cannot solve the problems within the U.S. but further disrupts the normal operation of international industrial and supply chains. It cannot prevent China’s development and revitalization but instead encourages over 1.4 billion Chinese people to work even harder.
The Section 301 tariffs imposed on China for the past six years have heightened economic burdens for businesses in both countries and U.S. consumers, disrupted international trade orders, and impacted global economic stability and security.
Moody’s has estimated that 92 percent of the costs of the tariff hikes will fall on U.S. consumers, while average U.S. household expenditure increases by $1,300 annually.
Instead of reflecting on the serious drawbacks of unilateralism and protectionism, the U.S. has made yet more mistakes, which have significantly raised the cost of imported goods and caused greater losses for American businesses and consumers.
Craig Allen, president of the U.S.-China Business Council, said that maintenance of the prior tariffs – with no reductions – and imposition of additional tariffs ultimately make it harder for American companies to compete in the U.S. and abroad, cost American jobs, and increase prices for U.S. manufacturers and consumers during a time of ongoing inflation.
At a critical moment of global economic recovery, the U.S. further imposing tariffs is causing trouble for the development of the world economy and is not well-received internationally.
German Chancellor Olaf Scholz and Swedish Prime Minister Ulf Kristersson have recently cautioned against the additional tariffs imposed by the U.S. on China, saying that “when it comes to import duties, I think that we (Sweden and Germany) essentially have a consensus that it is a bad idea to start dismantling global trade.”
Gita Gopinath, first deputy managing director of the International Monetary Fund, noted that under the surface, there are increasing signs of fragmentation. “If the trend continues, we could see a broad retreat from global rules of engagement and, with it, a significant reversal of the gains from economic integration.”
Unilateralism and protectionism go against the trend of the times. Faced with the recent years’ new and evolving situation in China-U.S. business ties, the two sides should stay committed to mutual respect, mutual benefit, and equal-footed consultation, follow economic and market rules, expand and deepen mutually beneficial business cooperation, respect each other’s development rights, and work for win-win outcomes for the two countries and the world at large.
