2018 China–United States trade war

US President Donald Trump had promised in his campaign to fix China's "longtime abuse of the broken international system and unfair practices". The United States of America filed a request for consultation to the World Trade Organization, in regard to concerns that the People's Republic of China was violating intellectual property rights.[1] The U.S. administration is relying partly on Section 301 of the Trade Act of 1974 to prevent what it claims are unfair trade practices and theft of intellectual property. [2][3] This gives the president the authority to unilaterally impose fines or other penalties on a trading partner if it is deemed to be unfairly harming U.S. business interests.[4] Trump had already, in August 2017, opened a formal investigation into attacks on the intellectual property of the U.S. and its allies, which cost the U.S. alone an estimated $225–600 billion a year.[5][6] As a result of the findings of the US Trade Representative Section 301 Investigation into China, the United States claims that China enforces laws that allow them to legally avoid certain terms previously laid out by The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[7] [8] In summary, the United States believes that certain Chinese laws counteract intellectual property rights by forcing foreign companies to engage in joint ventures with Chinese companies, in which their new Chinese partners are granted access and permission to use, improve, or replicate their technologies. In addition, the United States argues that China is not compliant in recognizing legitimate patents and that their policies discriminate against foreign imported technology.[9] Aside from the United States, several other nations have filed requests for consultation in regard to suspicions of Chinese violations, such as the European Union, Japan, Saudi Arabia, and Ukraine.[10]

The Trump administration said the tariffs were necessary to protect intellectual property of U.S. businesses, and to help reduce the U.S. trade deficit with China.[11][12]As a result, China has filed counter requests for consultation against the United States, arguing that their claims lack substantive evidence, and therefore do not have the legal authority to respond based on World Trade Organization rules.[13] As stated in Emerging Markets Finance & Trade, "China and the US bilateral disputes have become increasingly intensive. China criticizes the US of their export restrictions on hightechnology products, their unfair treatments of China’s market economy status, and unreasonable trade sanctions on China. Major areas of concern expressed by the US include large numbers of trade surplus, relatively ineffective record of enforcing intellectual property rights (IPR), discriminatory innovation policies, and mixed record on implementing WTO obligations." [14] Zhang Qingli, who serves as Vice Chairman of the Committee of the Chinese People's Political Consultative Conference said in a statement, "China never wants a trade war with anybody, not to mention the U.S., who has been a long term strategic partner, but we also do not fear such a war...The U.S. side has disregarded a consensus with China after multiple rounds of consultations, insisting on waging a trade war against China and continuing to escalate it."[15] However, in a statement made by White House Deputy Press Secretary Lindsay Walters she asserts, "The goal of United States trade actions is not to harm China's economy or start a trade war, but to get China to follow through on allowing fair competition and stop their unfair trade practices that have been hurting the American workers for years."[15] Since filing for consultations with the WTO, neither parties have been able to agree on a solution. In the meantime, both the United States and China have responded by continuing to engage in trade war activities.[16]

United States tariffs

The United States International Trade Commission publishes all tariffs in the document "Harmonized Tariff Schedule of the United States"[17]

Generally, tariffs depends on exporting countries which are treated in one of three different groups:

  • 1. Privileged countries such as most developing countries and countries with trade agreements such as NAFTA. Tariffs here are zero for most products.
  • 2. "Rate of duty column 2" is enhanced tariffs for legal trade with Cuba and North Korea
  • 3. All other countries.

The tariffs are usually given as a percentage of value, but it can also be given per Kg weight or per unit.

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