Chinese Trade Surplus with U.S. Hits High Amid Tariff Concerns

Dwayne Harmon
July 21, 2018

A number of countries have retaliated with levies on United States goods and some have filed complaints against U.S. tariffs with the World Trade Organization.

For Zhenjiang Kimtex Industrial Company in eastern China's Jiangsu province, the U.S. accounts for 40% of its sales, or about 3 million yuan ($445,000) a year.

These frictions started nearly two weeks ago with the imposition by Washington of 25 percent tariffs on Chinese products for a value of 34 billion dollars. Since the United States has cited national security to invoke the tariffs, there is little the organisation can do. Countries that join commit in principle to apply their lowest tariff rate on goods from other member countries, called most-favored nation treatment.

Sen. Ron Johnson said Wednesday that he has shared some of the trade war concerns with the President.

A new report by several experts for the Bertelsmann Foundation was warned that the credibility of World Trade Organisation's (WTO) is under major threat - the body faces extinction in light of the trade war between the United States of America and several other countries.

China Consul General to Los Angeles Zhang Ping said Thursday that advocates of a trade war should "know that a trade war is not something that can easily be won".

Just days after American Independence Day this year, US President Donald Trump's administration officially instituted 25 percent duties on $34 billion worth of Chinese goods on July 6, 2018.

The Trump administration on Monday also said it's filing a challenge at the WTO against China, the European Union, Canada, Mexico and Turkey for tariffs they imposed against the retaliation to earlier US tariffs on steel and aluminum. "If the tariffs are placed on our importers in August, then their costs will rise, and the prices of our products will go up".

U.S. Trade Rep. Robert Lighthizer said their retaliation violates the rules of the Geneva-based WTO, which mediates trade disputes.

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Analysts say the trade balance will be much less in China's favor during the months ahead as tariffs take a bite out of their business.

"It's not lost on us", said a top Republican operative involved in the midterms, "that the trade agenda could turn into a total debacle that would far outweigh the economic benefits of tax reform".

These tariffs appear to breach each WTO Member's commitments under the WTO Agreement.

The United States trades metals and industrial/manufacturing goods with all of the affected countries, leading to the conclusion that the retaliatory tariffs are not meant to "balance the scales", but rather to impose an impermissible punishment.

As expected, in response to the U.S. tariffs, China imposed increased duties on USA goods.

The US' national-security rationale for its steel and aluminium tariffs was unjustified, according to the statement, and Mexico's response was a reaction to that.

But the alliance appears to be interested in other areas, too, such as how to influence the USA government and global media.

The report was released a day after the annual China-EU Summit in Beijing, where there were signs of progress on a bilateral investment treaty.

"I urge you and your trade representatives to understand the plight of businesses struggling during this period of extreme uncertainty and do everything in your power to return certainty and stability to global markets", the Wisconsin Republican said.

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