Published: Sun, June 03, 2018
Economy | By

USA takes another swing at China with investment restrictions

USA takes another swing at China with investment restrictions

The White House said on Tuesday: "The final list of covered imports will be announced by June 15, 2018, and tariffs will be imposed on those imports shortly thereafter". To discuss: Qinduo Xu is a senior researcher with the Pangoal Institution.

Some people familiar with the matter have told Reuters that approval may depend on progress of broader talks and a reprieve from a USA government ban on sales by US companies to China's ZTE Corp, penalized for illegally supplying telecommunications gear to Iran and North Korea. He said, according to multiple news outlets,"Tariffs or threat of tariffs are a very useful and powerful negotiation tactic, and it has brought China to the negotiating table more seriously than ever before".

A joint statement issued by the two also talked about cooperation in addressing intellectual property, boosting two-way investment and creating a more fair and level playing field for competition.

"It [may] be a strategy".

While U.S. officials have sent conflicting signals during the dispute with China, one person familiar with planning for Ross' visit said the aim was to keep dialogue going. "Or it indicates an internal division [between the doves and the hawks], which Trump is finding hard to resolve".

Meanwhile, the Department of Commerce announced the affirmative preliminary determination in the countervailing duty (CVD) investigation of imports of certain plastic decorative ribbon from China, finding that exporters in China received countervailable subsidies ranging from 12.81 per cent to 94.67 per cent. Nathan King is CGTN's White House correspondent.

"The bilateral US trade deficit with China nearly disappears once you include sales of in-country subsidiaries", wrote Michael Cembalest, chairman of market and investment strategy at JPMorgan, in a note on Tuesday.

How effective a tactic that might be is a matter of debate.

It makes economic sense for US companies to make bold moves in China - demand is booming and the production cost is relatively low.

China now charges an import tariff on finished vehicles of 25%.

David Dollar of The Brookings Institution disagrees.

Digital savant Omar Gallaga of the Austin American-Statesman's 512 Tech says ZTE isn't a major player in the USA phone market, though it is a large company that has stolen US technology.

With about $20 billion in agricultural exports to China previous year, USA farmers and ranchers are closely following the bout.

The Trump administration's decision to slap tariffs on its top allies could weaken Commerce Secretary Wilbur Ross' hand as he landed in Beijing on Saturday to try to fend off a trade war with China.

At the same time, she adds, Beijing does to some extent see that the problems the USA has identified are problems that are also holding the Chinese economy back.

During a press conference in Beijing on May 30, William Zarit, chairman of the United States Chamber of Commerce in China (AmCham China) adopted this theory.

The new action came after the administration said earlier this month that it had suspended plans to impose $150 billion in tariffs for now and the president tweeted last week that a "different structure" would be needed in the trade talks involving the world's two largest economies.

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