Thu. Sep 29th, 2022

Prof. ST Hsieh

Director, US-China Energy Industry Forum

626-376-7460

[email protected]

June 6, 2022

US-China Relation defines US-Trade Relation, it is not the other way around. Further, US-China trades affect global economy and vice versa. Yes, fighting (US) inflation is more complex than cutting China tariffs. USTR determines tariff, yes and it was important to bring a “thoughtful, strategic, deliberate” approach to the U.S.-Chinese trade relationship. But it is up to President Biden and his White House team to provide a clear vision of US-China Relation then USTR will be in the position to shape a US-China trade relationship. To date, Biden Administration only has Secretary Blinken spoken on “US Approach to China” without many details.

Policy debates are commonplace in national politics. But when these debates become public and drag out, it is decision time and President Biden should make the call and move forward. If an important (trade) decision becomes tied to domestic election cycle, it is pathetic.

In her appearance on the same network’s State of the Union on Sunday, Raimondo pointed to “unexpected” developments that had derailed the global economy, and insisted: “We will get inflation under control.” Her position is precarious, because the future will be full of “unexpected” developments that may derail the global economy. Specifically, US is a major agent for Ukraine war as US sends money and military equipment, so the war goes on. Without US support, Ukraine will collapse immediately, but what is Biden’s exit strategy or timing? As long as there is no cease fire, the global economy is doomed, no matter what USTR and/or Commerce Secretary says or does!

China’s reaction seems pessimistic on US tariff removal. After all, US and China are not in talking terms yet. There is no bilateral trade negotiation, what we are talking here is only US unilateral actions.

USTR Tai says fighting inflation more complex than cutting China tariffs

David Lawder

Mon, June 6, 2022, 8:46 AM

WASHINGTON (Reuters) -U.S. Trade Representative Katherine Tai on Monday said fighting inflation is a more complicated issue than can be addressed with a “singular focus” on China tariffs, and that it was important to bring a “thoughtful, strategic, deliberate” approach to the U.S.-Chinese trade relationship.

Tai, in remarks to the Washington International Trade Association, said inflation was “scary” and hurting Americans’ pocketbooks but was a complicated issue with many causes.

“The economy is large and there are a lot of pressure points and levers in that economy,” Tai said. “If we’re going to take on an issue like inflation, and given the seriousness that it requires, then our approach to tools for mitigating and addressing that inflation need to respect that it is a more complicated issue than just tariffs at the border.”

Tai’s remarks indicated that a debate within President Joe Biden’s administration was continuing over whether to cut some U.S. “Section 301” duties on hundreds of billions of dollars of Chinese imports of up to 25% imposed by former President Donald Trump.

Tai, referring to U.S. ties with China, said it was important for the Biden administration “to bring a thoughtful, strategic, deliberate approach to how we manage this relationship overall.” Among the administration’s most important responsibilities “is to figure out how to get this relationship right – and nothing about this relationship is easy,” Tai added.

Tai has been at odds with U.S. Treasury Secretary Janet Yellen over the future of the Section 301 tariffs, with Yellen arguing that they hurt U.S. consumers and businesses and that they could have some effect on reducing prices.

Tai said the Biden administration over the next two weeks would begin defining its vision for another key trade initiative with 13 Asian countries. Tai added that the Indo-Pacific Economic Framework talks need to be “holistic, extremely flexible, adaptable and really, really pragmatic.”

She said she hopes to have a more formalized convening of participating countries this summer, including at the trade minister level, to discuss the negotiating pillars of labor rights, high environmental standards, digital trade and supply chain resilience.

Biden commerce secretary shifts blame for inflation on to Russia’s war in Ukraine

Richard Luscombe

Sun, June 5, 2022, 11:35 AM

Joe Biden’s commerce secretary Gina Raimondo attempted on Sunday to shift blame for the US inflation crisis back onto Russia’s war in Ukraine, days after another cabinet member admitted the presidential administration had made failures in predicting its impact on the economy.

Janet Yellen, the treasury secretary, conceded last week she made an error in 2021 when she said inflation, which has only recently dropped from a near 40-year high, posed merely a “small risk”.

“I think I was wrong then about the path that inflation would take,” Yellen told CNN last Tuesday.

In her appearance on the same network’s State of the Union on Sunday, Raimondo pointed to “unexpected” developments that had derailed the global economy, and insisted: “We will get inflation under control.”

She said: “I don’t think anyone predicted (Russian president Vladimir) Putin’s war in Ukraine, or various other things that have happened that have been unexpected. It’s worth noting that gas prices are up $1.40 a gallon since Putin moved troops into Ukraine.”

Her comments will be seen as part of a concerted White House push to deflect blame for the nation’s economic troubles away from Biden, who has faced accusations of ignoring experts’ warnings over inflation and, more recently, the baby formula shortage.

Calling inflation his “top domestic priority”, the president and his acolytes have embarked on a messaging campaign in recent weeks directed at voters in November’s midterm elections, and playing up his economic successes such as the bipartisan infrastructure act.

It comes as gas prices reach almost record daily highs, up to $4.84 a gallon according to the AAA, the cost of groceries and services continue to soar, and new parents scramble to find baby formula.

Raimondo herself appeared to torpedo the effort later in the interview by admitting she only learned of issues with formula in April, the same time as Biden. But production at the nation’s biggest manufacturing plant, owned by Abbott in Michigan, was closed down after bacteria was found during inspections as early as January, and problems were evident at the site late last year.

“I’m not involved in the administration’s response here, but I think they’re doing a very good job and as soon as they learned that this could be a severe shortage they got on top of it,” she said.

The Michigan facility resumed production this weekend after a lengthy shutdown, although it will likely be several weeks before formula appears on shelves.

In another sign of growing disconnect in Democratic circles over the economy, California congressman Adam Schiff spoke out strongly on Sunday against Biden’s planned summer trip to Saudi Arabia, one of the world’s leading oil producing nations.

“We should make every effort to lower oil prices, but going hat-in-hand to someone who’s murdered an American resident would not be on my list,” Schiff said on CBS’ Face the Nation, referring to the implication of Saudi Arabian Crown Prince Mohammed bin Salman in the 2018 killing of Washington Post columnist Jamal Khashoggi in Turkey.

“I wouldn’t go,” Schiff continued. “I wouldn’t shake his hand. I would want to see Saudi Arabia lower oil prices, or increase their production [and] I’d want to see them make changes in their human rights record. I want to see them hold people accountable that were involved in that (Khashoggi) murder … before I would extend that kind of dignity.”

SOURCE / ECONOMY

US’ intention to remove tariffs in doubt despite more signals from official

Empty talks won’t help ease inflation: experts

By GT staff reporters Published: Jun 06, 2022 11:22 PM

US officials have said that they are mulling lifting Trump-era tariffs on Chinese goods to ease inflation. But Chinese analysts said that such remarks are mostly political posturing for the US midterm elections, noting that easing inflation in the US requires the removal of all tariffs on Chinese goods.

US Commerce Secretary Gina Raimondo said on Sunday that Biden had asked his team to look at the option of lifting some tariffs on China that were put in place during the Trump era.

Raimondo made the comment to CNN in an interview when asked about whether the US government was weighing lifting tariffs on China to ease inflation.

“In the US, tariff decisions are not made by the Department of Commerce, but by the Office of the US Trade Representative (USTR). Why would Biden ask Raimondo to do the tariff removal analysis when USTR Katherine Tai is supposed to do it?” Gao Lingyun, a trade expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Monday.

“To cater to businesses that expect tariffs to be removed for the midterm elections, the Biden administration sent some kind of conciliatory signals through [Janet] Yellen and Raimondo,” said Gao.

In May, US Treasury Secretary Yellen voiced support for removing some tariffs on Chinese imports that “aren’t very strategic” but are hurting US consumers and businesses. But Tai preferred to keep them in place to develop a more strategic China trade agenda, Reuters reported, citing a source close to the matter.

Tian Yun, a Beijing-based veteran economist, said that the US has shot itself in the foot as it is using politics to suppress the globalization process it initiated.

“In particular, I think a trade war between the US and major trading partners like China is irrational. It not only affects bilateral trade, but also affects the international supply chain. The US has disrupted the global division of labor and production,” Tian told the Global Times on Monday.

Raimondo also said that some tariffs on steel and aluminum will be kept to “protect US workers and the steel industry,” but said “it may make sense” to lift tariffs on other products, like household goods and bicycles.

Analysts said that such “removals” will offer limited help to counter US inflation, as those products account for only a small part of US consumption and of Chinese exports.

“If the US removes all tariffs on Chinese goods, the improvement in US inflation will be 1-1.3 percent, as estimated by US scholars, while my estimate is around 1.5 percent,” said Gao.

Tian also said that falling prices for household items and bicycles had a relatively small impact on the overall level of US inflation.

“In the US, spending on housing, education and medical care accounted for more than 30 percent of total consumption. In contrast, the consumption of food and beverages and general daily necessities only accounted for a small part,” Tian said on Monday.

Tian noted that steel and aluminum are basic raw materials for production that will transfer the impact of upstream price hikes to the whole industry chain, such as infrastructure. “If the US keeps tariffs on Chinese steel and aluminum products, it will not help US consumer,” he said.

China’s steel and aluminum exports to the US reached $22.1 billion in 2021, accounting for 3.84 percent of its total exports to the US, according to data from the General Administration of Customs of China (GACC).

Tian said that for the US to address its inflation crisis, lifting all additional tariffs on Chinese products is necessary. “The US needs China more than China needs the US right now,” he said.

Graphic: GT
Graphic: GT

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