China Urges US To Revoke Steel Tariff Decision

- Mar 11, 2018-

China has called on the United States to revoke its decision to impose tariffs on foreign steel and aluminum exports to the US.

US President Donald Trump signed two proclamations on Thursday afternoon in the White House to impose 25 percent tariff on steel imports and 10 percent tariff on aluminum imports but he offered potential exemption for a number of countries.

Trump first announced the tariffs on March 1 after a Commerce Department investigation under the Section 232 of US Trade Expansion Act of 1962 that found the imports threaten to impair US national security.

Wang Hejun, head of the trade remedy and investigation bureau of China's Ministry of Commerce, said the US measures are in essence trade protectionism in the guise of national security. He said most US steel and aluminum imports are for civil use and by no means impair US national security.

Wang said the US abuse of "national security" provision is a wanton sabotage of the multilateral trading system represented by the World Trade Organization, and is set to hurt the normal international trading order.

"China firmly opposes that," he said in a statement posted on the ministry website.

"China urges the US to respect the authority of the multilateral trading system and revoke the decision as soon as possible,"

Wang said China has lodged solemn complaints with the US side through multiple channels and said China will assess its loss caused by the US measures. "(China) will take strong measures to safeguard its legitimate interests," Wang said.

The China Iron and Steel Association on Friday called on the Chinese government to retaliate against the US move by targeting "stainless steel products, galvanized sheet, seamless pipe, coal, agriculture products and electronic products," imported from the US, the association said in a statement posted on its website.

Trump's decision, though applauded by US steel and aluminum producers, was strongly opposed by many who worry about a potential trade war with US trade partners, a disruption in the global trading system and a rising cost of raw materials for many US industries.

Trump said on Thursday that Mexico and Canada, the two countries that are renegotiating with the US the North American Free Trade Agreement (NAFTA), will be exempted for now. He said the tariffs will still apply to the US' two North American neighbors "if we don't make the deal on NAFTA and if we terminate NAFTA because they are unable to make a deal that's fair".

Some US security allies could also be excluded if they can justify it, according to Trump.

The new tariffs will take effect on March 23.

"The actions we are taking today are not a matter of choice; they are a matter of necessity for our security," Trump said at the signing ceremony at the White House, surrounded by key cabinet members and several representatives from the steel and aluminum industries.

"You don't have steel, you don't have a country," Trump said.

Many US lawmakers from Trump's Republican Party have criticized the decision. John McCain, Senator from Arizona, said that the tariffs will not protect America.

"They will harm the American economy, hurt American workers & damage relations with America's allies & partners," McCain said in a tweet on Thursday. Major steel and aluminum exporters to the US are close US allies and partners.

Jeff Flake, a Republican Senator from Arizona, threatened on Thursday to draft a bill to nullify Trump's decision.

There has been intensive lobbying going on since Trump's March 1 announcement. More than 100 Republican lawmakers sent a letter to Trump on Wednesday urging him to drop plans for the sweeping tariffs.

Trump's controversial decision has caused the departure of his National Economic Council Director Gary Cohn after he lost the struggle to convince Trump to abandon the tariff plan.

Before Trump's signing, World Bank CEO Kristalina Georgieva warned Trump to be "careful" before imposing the controversial tariffs, saying that they could affect global trade, Reuters reported.

The European Union, where Georgieva once served, on Wednesday announced a provisional list of US items it plans to retaliate with.

Trump noted on Thursday that the US is negotiating with China. "We're in the midst of a big negotiation. I don't know if anything will come of it. They have been very helpful," said Trump, without offering any details.

On Wednesday, he tweeted that China has been asked to develop a plan for the year of a $1 billion reduction in their trade deficit with the US. "Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!" he wrote on the tweet.

Trump said on Thursday he has a lot of respect for President Xi Jinping but said the bilateral deficit will be cut "one way or another".

"We have a deficit with China of at least $500 billion and when you add intellectual property, it's much higher than that," he said.

Trump has always depicted the US trade deficit as loss for the US, a view that most economists disagree with. China's trade deficit with the US was $375 billion in 2017, according to the US Commerce Department.

Chinese Foreign Minister Wang Yi said in Beijing on Wednesday that history showed that trade wars were not the correct way to resolve problems. "Especially given today's globalization, choosing a trade war is a mistaken prescription. The outcome will only be harmful," he said.

"China would have to make a justified and necessary response."