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Customs war with the United States: China files a complaint with the World Trade Organization

2019-09-02T17:34:23.581Z

New tariffs came into effect on Sunday in the United States on Chinese products representing billions of dollars in annual imports.


China announced on Monday (September 2nd) that it had lodged a complaint with the World Trade Organization (WTO) in response to the entry into force in the United States on Sunday of new tariffs on products representing billions of dollars in annual imports.

"These American taxes seriously violate the consensus reached by the heads of state of our two countries in Osaka" in Japan, at the end of June, during the G20 summit, marked by the announcement of a truce in the bilateral trade war, responded the Chinese Ministry of Commerce in a statement. "China is very dissatisfied and staunchly opposed to this. In accordance with WTO rules, it will firmly protect its rights and legitimate interests, " the ministry said, adding that the complaint had been filed with the DSB, the dispute settlement body of the WTO.

China and the United States have been engaged for more than a year in a trade showdown that has resulted in the reciprocal imposition of punitive tariffs on more than $ 360 billion in annual trade. At the G20 summit in Osaka in late June, US presidents Donald Trump and Chinese Xi Jinping agreed to revive trade talks.

But the truce has fizzled. On August 1, US President Donald Trump announced additional tariffs of 10% on the $ 300 billion of Chinese imports hitherto spared, as of September 1. On August 23, Beijing announced tariff retaliation for $ 75 billion worth of US goods and cars. In response, the US administration decides to increase to 15% the additional customs tariffs announced on August 1st.

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Negative repercussions on the economy

These additional tariffs relate to part of the $ 300 billion worth of goods imported from the Asian giant that had previously been spared by previous US measures. The goods concerned cover a very wide range of products, in particular from the food sector (ketchup, cut beef, pork sausages, fruit, vegetables, milk, cheese, etc.). Some sporting goods such as golf clubs or bicycles, musical instruments, furniture, crockery or even highchairs for children will also be surcharged, according to the official list.

Economists at the Washington-based think tank Peterson Institute for International Economics estimated the value of goods that will be subject to these new tariffs at $ 112 billion. They add to the more than 250 billion dollars of Chinese goods that were already overtaxed. And, by the end of the year, all imports from China (some 540 billion based on those of 2018) will be surcharged with a final salvo scheduled for December 15.

US President Donald Trump, campaigning for a second term, remained deaf to many warnings about the potential negative impact on the economy and markets. However, he seemed to spare the spirits by referring to talks between Washington and Beijing. "We have conversations with China. Meetings are scheduled. Calls are in progress, " he said. "I guess the September meeting continues to be relevant. This has not been canceled. We will see what happens, " he added. For the moment, the Chinese side has not confirmed the holding of such talks or meetings.

Since March 2018, Donald Trump has embarked on a ruthless customs war to impose a treaty ending unfair trade practices such as the forced transfer of US technology and the massive subsidy of Chinese state-owned enterprises. This strategy has proved to be ineffective for the moment, although it weighs heavily on the Chinese economy. Refusing to negotiate under threat, Beijing is inflexible.

Read also Donald Trump relaunches trade hostilities with China

Degraded confidence

A further escalation of tariffs is likely to severely affect China's economic growth, warned the International Monetary Fund (IMF). And, beyond China, the economy of the planet, largely supported by trade, will deteriorate, has repeatedly alerted this institution.

Read the column: "A year ago, some relativised the reality of the trade war. Today, we are on the verge of a runaway "

Uncertainty about the outcome of this conflict is now weighing on corporate investment and US household morale. A University of Michigan consumer confidence survey shows that consumer confidence in August recorded its biggest deterioration since December 2012. "The data indicate that the erosion of consumer confidence due to pricing policies is now well committed, " said Richard Curtin, the economist leading the bi-monthly survey.

Sign that the Trump administration might have some fears about the impact of this new escalation: some flagship Christmas shopping products will not be taxed until December 15th. This is the case of phones and laptops, video game consoles, some toys, computer screens or some shoes and sportswear. In the United States, consumption generates 75% of economic growth.

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Source: lemonde

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