Posted on 12/04/2016 11:34:56 PM PST by vannrox
By Adams Lee on November 30, 2016 1. China AD/ CVD Actions. Few realize that China has already initiated its own antidumping (AD) and countervailing duty (CVD) actions against companies from the United States and other countries. Having been on the receiving end of the bulk of AD/CVD actions worldwide, China has incorporated into its own AD/CVD procedures some of the most effective techniques and practices from the AD/CVD investigations conducted by the U.S., EU, and other jurisdictions on Chinese companies. For example, China’s AD questionnaires have burdensome and comprehensive sales and cost data requests, similar to, and even in some cases, exceeding US practice. China’s AD/CVD margin calculation methodologies are as non-transparent as the EU’s margin calculations. China has even copied many of the annoying administrative practices of the US and EU, such as giving only limited extensions, disregarding national holidays, and insisting on burdensome filing requirements, like requiring all documents filed be fully translated into Chinese. It’s no accident that my law firm’s trade team works so closely with our China law team. Most of China’s AD/CVD actions have so far been largely symbolic and usually initiated in response to specific U.S. actions against China. Though many of China’s AD/CVD cases have involved well-known companies (Corning, Dupont, Tyson Foods, and Cadillac, to name some), most have had only limited economic impact. However, more recent China AD/CVD actions are starting to have greater economic impact. After the US and EU filed AD/CVD actions against Chinese solar cells and modules in 2011, China initiated its own AD/CVD actions against solar-grade polysilicon from the United States, EU and Korea. China’s AD/CVD action effectively closed off the largest export market for US polysilicon producers, and was a significant contributing factor to REC Silicon’s decision to shutter its polysilicon production operations in Washington and Montana. REC Silicon just this month blamed China trade actions for its less than stellar third quarter revenues.What Will China Do If President Trump Starts a Trade War?
POSTED IN CHINA BUSINESS
China Law Team
By Li Feng, in the China Daily (bit.ly/2gFMaDa)
During the recent presidential campaign, President-Elect Donald Trump said “we can’t continue to allow China to rape our country” and vowed to aggressively fight back against China’s unfair trade practices. Trump promised his trade agenda would:
Declare China to be a currency manipulator Impose a 45 percent tariff on all Chinese imports into the U.S.
Abandon/ renegotiate “bad” trade agreements such as the Trans-Pacific Partnership (TPP), and Use the full arsenal of US trade laws against Chinese unfair trade practices.
The above proposed trade actions raise many legal and policy questions. Can a President Trump really do those things? Should he do those things? Will such actions achieve anything? Pundits, academics, lawyers, and ultimately U.S. judges will eventually weigh in on these questions for real, but China is not going to wait for the resolution of these questions. If the United States engages in some or all of the above Trump-proposed actions, China will no doubt retaliate with its own actions.
In this post I discuss three fairly likely ways China will respond to any attempts by a Trump administration to “get tough on China.”
In late September, 2016, China announced preliminary AD duties of 33.8% and CVD duties of up to 10.7% against imports against U.S. distillers’ dried grains (DDGS), an ethanol by-product used as animal feed. The U.S exported $1.6 billion of DDGS to China in 2015. China also apparently also has an AD/CVD action prepared against U.S. soybeans exports to China and is just waiting for the right time to initiate that action. The U.S. is the largest producer and exporter of soybeans and U.S. companies exported over $10 billion of soybeans to China in 2015. If the Trump Administration gets tough against China, US soybean producers likely will incur massive collateral damage in an escalating US-China trade war.
2. China Antitrust Enforcement. China may also respond against U.S. anti-China trade actions by stepping up its enforcement of its antitrust laws against U.S. companies. China implemented its anti-monopoly law only in 2008, but it has become increasingly active in reviewing mergers and investigating abuse of market dominance. In February 2015, Qualcomm paid a $975 million fine to settle Chinese antitrust allegations of having abused its market dominant position. This year, China’s antitrust authorities have targeted pharmaceuticals, medical devices, vehicle manufacturing, ocean shipping, and smart manufacturing as industries of particular concern. Because these industries are already prioritized for extra scrutiny, China could relatively easily ramp up its antitrust enforcement actions against U.S. companies in these industries to retaliate quickly against U.S. trade actions against China.
3. China Criminal Enforcement. China might also retaliate against U.S. companies by more strictly enforcing its criminal laws against U.S. company officials in China. Earlier this month, China detained more than a dozen employees of Crown Resorts, Ltd, an Australian gambling company, and it will be pursuing criminal charges against at least three of them. See Foreign Executives Arrested in China: Please Do NOT Look Away. No one knows where and when the next China anti-corruption effort will occur, but foreign companies doing business in China in important or politically sensitive industries need to be extra cautious. Company officials need to know which way the wind is blowing in China, particularly when enflamed U.S. trade rhetoric may trigger a Chinese backlash. Our China lawyers are already hearing rumors that China is going to start criminally pursuing those who use independent contractors in China but have no company in China and pay no employer or income taxes in China. China might be planning this sort of action against smaller companies as a sort of warning shot against the United States. For more on what this situation looks like, check out China’s Tax Authorities Want You.
Though Trump has talked a lot about China, China itself has so far taken the high road, noting that U.S.-China trade relations are “too big to fail.” China appears to be waiting to see if Trump’s actions will in fact harm China. For example, the United States’ abandoning the Trans-Pacific Partnership (the TPP) has actually allowed China to step in and fill the TPP void by promoting its own Regional Comprehensive Economic Partnership trade agreement (RCEP).
If the United States starts engaging in trade tactics China considers excessive, it is naïve to think China will do nothing in return. China has a home market that is in many cases the biggest export market for US producers and China has many options under its own laws to directly or indirectly retaliate against U.S. interests. Anyone wishing to do business in China or with China should consider the risks of being targeted for retaliation in a spiraling US-China trade war and they should start preparing to try to minimize the fall-out from that.
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The article link is incorrect.
It should be http://www.chinalawblog.com/2016/11/what-will-china-do-if-president-trump-starts-a-trade-war.html
We’ve been in a trade war with China since they were let into the WTO.
Ridiculous to think this is going to be some new super shocking trade war.
What will liberals do if he doesn’t start a trade war
and instead negotiates policies that benefit both parties?
Splodey heads!
First.. no Country can really afford it.
Secondly.. Trump is smart enough to avoid anything that lasts longer than 30 days.
Start?!
If we start taxing all the rubber trashcans from Red China, they will start taxing all the ....all the...thingamajigs we export to them tax free.
Mr T will not start a trade war. Nor will he see that the Clintons receive justice. He will not repeal 0bamakare as the weasels are already squeaking. There are many actions promised.
How many can he fail to deliver and expect to win a second term?
China will fight back. U S resource dealers will be devastated. Coal, lumber, agriculture, minerals et al will suffer greatly.
It won’t take more than the first hundred days to process you wrong... NEXT!
The sheath is mightier than the sword. He puts a scare into them, they negotiate terms to placate him so that he does not do what they fear. Any poker player would do the same.
"China may also respond against U.S. anti-China trade actions by stepping up its enforcement of its antitrust laws against U.S. companies...This year, China’s antitrust authorities have targeted pharmaceuticals, medical devices, vehicle manufacturing, ocean shipping, and smart manufacturing as industries of particular concern."
So, China copies our products, copies our factories, and then within their own counterfeit economy, sues us for antitrust. HO HO HO, pull this leg it plays "Jingle Bells"...
Here's to President Trump smashing them like a bug, like a Confucian cockroach: "Hey here's the bottom line, it would be a shame if your GDP dropped below 2% for the next couple of quarters, pretty sure you'd have your hands full bigly after that..."
“There will be NO trade war.”
As it stands now, doesn’t China need for the US to buy all the stuff they manufacture? so they have an economy? Just thinkin out loud
Regardless of the circumstances China will attempt to push a military situation on Trump within weeks of taking office in the White House to see what he’s made of. Apparently they weren’t impressed with the last occupant.
Trade? Meh. Bill Clinton needs to be arrested for (among other things) giving the Chicoms missile technology to hit us with pinpoint accuracy via his cronies at Loral.
He has no intention of starting a trade war - he will use his leverage to get better deals for us and since we are the biggest customers of many places, that shouldn’t be too difficult (other than the howls of “women and children hurt the most”)...
Trade wars are much like nuclear wars. The deterrence value is zero if you preemptively rule out using them.
The title should be “ What will China Do When Trump Enters the Trade War”
BINGO!!!
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