China Threatens U.S. With Higher Import Tariffs

The New York Times ^ | November 21, 2003 | KEITH BRADSHER

[sarcasm]

ONG KONG, Nov. 20 - China's vice minister of commerce threatened on Thursday to raise tariffs on imports from the United States in a steel dispute, and summoned the American ambassador to protest the Bush administration's announcement this week of plans to impose quotas on Chinese sleepwear, bras and certain fabrics.

But the Chinese government also took pains to limit the scope of its disagreement with the Bush administration. A Chinese foreign ministry spokesman in Beijing said that two trips to the United States by purchasing teams had been postponed because of difficulties in obtaining visas for the teams' members, and not as a move toward trade retaliation.

With Chinese exports to the United States exceeding imports by nearly six to one, and with Beijing desperate to preserve the political stability that rapid, export-led economic growth has produced, China has little to gain and much to lose from a trade war. By talking tough but doing nothing, Beijing may actually help the White House resist protectionist pressures within the United States, while leaving actual trade unharmed.

"I don't believe there will be retaliatory measures against existing U.S. exports to China," although some purchasing expeditions may be delayed, said Andy Xie, an Asia economist for Morgan Stanley. "The Chinese are very conscious of the damage protectionism could do to China, that's why they want to make a lot of noise."

Ever since the Tiananmen Square killings in 1989, China has beaten back repeated attempts by protectionists and human rights advocates to restrict significantly its trade access to the American market. Each time, Beijing's diplomats have worked with American corporate leaders to rally members of Congress from states that hope to export more to China, like Midwestern states that are already selling more grain and Washington state, which is shipping more Boeing planes.

The vice minister of commerce, Ma Xiuhong, said on Thursday that China would raise tariffs on imports from the United States if American steel tariffs are not lifted in compliance with a World Trade Organization ruling last week that the tariffs violate international trade rules, according to the official New China News Agency. The European Union has already threatened to impose retaliatory tariffs on $2.2 billion worth of American exports of apples, avocados, oranges, harvesting machines, toilet paper and a few other products if the United States does not back down.

The New China News Agency did not single out any specific American products for possible retaliation. Bush administration officials have said that the president is reviewing what to do about the steel tariffs, which range up to 30 percent and were imposed in March 2002.

Threats of retaliatory tariffs when the W.T.O. rules against a country are a staple of international trade negotiations, with countries commonly choosing products from politically influential regions in the hope of bringing more pressure to bear, as the Europeans have done by picking especially on California farm goods this time. Usually a settlement is reached before any tariffs are imposed, but there have been a few exceptions.

When western European countries restricted frozen chicken imports in the early 1960's, President Lyndon B. Johnson responded by imposing a 25-percent tariff on imported pickup trucks that continues to protect Detroit today. Companies like Toyota and Nissan build pickup trucks at plants in the United States to get around the tariff, and other companies sell American-built trucks under their own name plates.

Ms. Ma also summoned the United States ambassador to China, Clark T. Randt Jr., on Thursday and expressed "deep regret and firm opposition" to the American decision to begin a three-month negotiation that is likely to end with an imposition of quotas on certain Chinese textile and apparel shipments to the United States.

China's vice foreign minister, Zhou Wenzhong, also met with Mr. Randt on Wednesday to protest the decision on bras, sleepwear and knit fabrics and warn that China reserved the right to challenge the textile decision before the World Trade Organization, much as Brazil, China, Japan and the European Union have already done successfully with the Bush administration's steel tariffs.

Many governments, including that of the United States, occasionally ask other countries' ambassadors to come in for meetings when they have diplomatic or trade differences.

[NoControllingLegalAuthority]

Boy, China limiting U.S. imports will really hurt! (Like they buy much, anyway.)

[dennisw]

This is the usual Chinese strategy. General Electric and the few others who actually make money (or think they will in the future) exporting stuff to China will now start yelping and protesting, doing China's dirty work. These sellers constitute China's most effective US lobby.



And they don't get pay one thin dime.

[madison10]

How come they can do it to us, but we can do it to them? Where's the WTO?