U.S. Warns China of Harshest-Yet Trade Retaliation : International commerce: Washington threatens action if Beijing does not lift barriers on American goods by Oct. 10.
The Bush Administration, often accused of turning a blind eye to China’s faults, threatened the Chinese government Friday with the most far-reaching American trade retaliation in history if it does not agree by Oct. 10 to lift barriers against American goods.
The threat--which could boost prices that Americans pay for Chinese products ranging from textiles to sporting goods--came in Washington after American and Chinese negotiators failed earlier in the day to reach agreement in Beijing in their fifth round of talks.
“If China is to continue to enjoy full access to U.S. markets, then it must play by the rules of the international community and allow access to its markets,” U.S. Trade Representative Carla Anderson Hills said in a statement issued in Houston, where she had attended the Republican National Convention.
American officials made it clear they hope that the threat will prove persuasive enough to sway the Chinese. “No one wants a trade war here,” said Michael Moskow, deputy U.S. trade representative. Moskow will fly to Beijing in mid-September for yet another round of talks on the problem.
Moskow said that the United States will slap retaliatory tariffs on a list of $3.9 billion worth of Chinese goods if agreement is not reached by the October deadline. “This is the largest such list that the United States has ever published,” he said.
Goods on the list could be subject to a tariff of as much as 100%, thus doubling the price of the item. The average tariff on imports to the United States, Moskow said, is now 3% to 5%.
Moskow said the list, which will be published in a few days, includes items from almost all categories of imports from China. He said the main imports are textiles, toys, sporting goods, electrical machinery, shoes and luggage.
Moskow said the list will not include goods that American consumers cannot get elsewhere. “If the product only comes from China,” he said, “then it will be more of an adverse impact on United States consumers and workers and importers, and we tried to avoid those products.”
Moskow said the Chinese are limiting American imports with outright prohibitions, quotas, demands for licenses and unreasonable standards requirements.
China is also not revealing its import plans and policies, he said. American exporters need such knowledge to gauge their chances to sell in China.
The threatened Chinese goods represent 20% of Beijing’s exports to the United States last year. In 1991, China exported $19 billion worth of goods to the United States while the United States exported $6.3 billion to China--a balance in China’s favor of $12.7 billion.
“China is fast becoming an important player in the international trading system,” Moskow said. “China’s two-way trade with the world in 1991 was $136 billion and is likely to surpass $165 billion this year. We cannot allow a country with this level of trade to play by its own rules. If they want to benefit from exports, they must allow imports.”
Moskow said the U.S. aim is to pressure China into bringing its trading practices in line with the General Agreement on Tariffs and Trade--the international treaty that governs trading practices and provides a forum for settling disputes and negotiating reductions. And, he said, “we want to provide full opportunity for American manufacturers and farmers to have unimpeded access to the growing Chinese market to create jobs in the United States.”
The deputy trade representative said that if the mid-September talks go well in Beijing, there will be another round in Washington during the first week in October, just before the deadline.
China and the United States were engaged in a similar trade confrontation earlier this year over China’s refusal to protect American copyrights and other intellectual property. But the U.S. government threatened retaliation, on a smaller scale than is threatened in the current dispute, and the Chinese gave in.
The Bush Administration has faced a barrage of criticism for favoring China, mainly by refusing to retaliate after its troops crushed pro-democracy demonstrations in Tian An Men Square in 1989.
