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Today's Insights: U.S. Delays 'Major Trade Decision' for the Second Time
Table of Contents
- The United States Postponed the "Major Trade Decision" for the Second Time
- USTR's Statement on the Delay
- Impact of Tariffs on Various Industries
- The Political Dilemma for the Biden-Harris Administration
- Harris's Position on Tariffs
- Economic Consequences of Tariffs
- China's Response to the US Tariff Increase
The United States Postponed the "Major Trade Decision" for the Second Time
On July 30, the United States postponed a "major trade decision" for the second time, stating that it would announce its decision in the "next few days." The USTR (United States Trade Representative) announced that the final ruling on proposed changes in the Section 301 investigation into China's behavior, policies, and practices related to technology transfer, intellectual property, and innovation would be delayed.
USTR's Statement on the Delay
The USTR released a statement saying, "On July 30, 2024, USTR announced its intention to announce the final ruling in August. USTR is continuing to work on finalizing the decision and intends to announce it in the next few days." According to Bloomberg, USTR's formal approval and notification are theoretically just "routine matters," but the decision has now been postponed twice. Public opinion suggests this delay reflects internal conflicts within the United States and the Democratic Party regarding this issue.
Impact of Tariffs on Various Industries
In May, the United States released the results of a four-year review of the 301 tariffs on China, announcing further increases in tariffs on various Chinese products, including electric vehicles, lithium batteries, photovoltaic cells, key minerals, semiconductors, steel and aluminum, port cranes, personal protective equipment, and more. The tariffs, involving about $18 billion in Chinese products, were originally scheduled to take effect on August 1 but were postponed due to the need for further study of over 1,100 public opinions from the industry.
The Political Dilemma for the Biden-Harris Administration
This decision presents a significant challenge for the Biden-Harris administration: lowering tariffs may attract criticism from Republicans, while continuing with the original tax increase plan could cause discontent among some Democrats due to rising costs. Manufacturers from electric vehicles to power equipment have expressed their dissatisfaction with the tariffs, arguing that they could disrupt the global trade order, increase costs, harm the interests of businesses and consumers, reduce employment, and weaken the competitive advantage of American companies.
Harris's Position on Tariffs
The New York Times pointed out that the debate over tariffs is a key economic issue. However, Harris's campaign team has not yet expressed a position on tariffs. Analysts believe that the Democratic Party is in a dilemma, needing to win votes from the working class while also considering the financial support of Wall Street and Silicon Valley, which are highly sensitive to prices.
Economic Consequences of Tariffs
Reviewing the record of the Trump and Biden administrations on imposing tariffs on China, Sanjay Patnaik, director of the Center for Regulation and Markets at the Brookings Institution, told NPR that the latest research indicates a net loss of at least 140,000 to 275,000 jobs in various industries. Additionally, the prices and costs American consumers have to pay have increased. Patnaik noted that while the tariffs may have protected some jobs in the US steel industry, downstream companies in the supply chain have faced higher prices, reduced production, and decreased employment.
China's Response to the US Tariff Increase
In response to the US raising the 301 tariffs on some Chinese products, a spokesperson for China's Ministry of Commerce stated that the US abused the 301 tariff review procedure for domestic political considerations and further raised tariffs on some Chinese products, politicizing and instrumentalizing economic and trade issues. The spokesperson added that China is strongly dissatisfied with this political manipulation and that the US should immediately correct its wrong practices and cancel the tariff increase measures. China will take resolute measures to defend its own rights and interests.
