China Center for International Economic Exchanges

Wang Jun: US probe just protectionism
Date:Jun 19,2017    Source:CCIEE

The US investigation into the effects of aluminum and steel imports on the country's national security is an excuse to expand trade protectionism through the use of tariffs, and this may harm its seemingly improved trade and economic relationship with China, experts noted.

The comments came after the US government, under the rarely used Section 232 of the Trade Expansion Act of 1962, launched two separate probes in April into whether foreign aluminum and steel products arriving in the US threaten to impair US security.

The act allows the president to adjust imports with measures including the use of tariffs, if excessive imports are found to be threatening US national security.

"I look forward to reading the 232 analysis of steel and aluminum to be released in June. Will take major action if necessary," US President Donald Trump tweeted on May 28.

But experts said that aluminum and steel imports pose no threat to US national security, and that the country is using it as an excuse.

The launch of the Section 232 investigation is actually a form of trade protectionism, a crucial factor that curbs trade between China and the US, according to Wang Jun, director of the Department of Information at the China Center for International Economic Exchanges.

"Primary metal manufacturing is a low-end industry that the US transferred overseas years ago. It is also the result of global resource allocation and the country's high labor costs. Hence, it does not pose any threat to the US," Wang told the Global Times Sunday.

The investigation may be an alternative to a so-called border adjustment tax on imports, which Trump previously proposed, and its real purpose is to restrict imports through the use of tariffs, Huo Jianguo, vice chairman of the China Society for WTO Studies, told the Global Times on Sunday.

"We call on the US side to fulfill its responsibility to maintain the multilateral trade order, and we hope that its actions and measures are in line with the relevant rules of the WTO," Ministry of Commerce (MOFCOM) spokesperson Sun Jiwen told a briefing in April.

Fierce game

Although the Sino-US trade and economic relationship seems to be a little improved after a meeting between Chinese President Xi Jinping and US President Donald Trump in April, some tension persists as the US attempts to take action to protect its own economy and reduce its trade deficit with China, experts said.

As part of the China-US 100-day action plan announced in May, the two countries finalized details on June 12 to allow the US to begin beef exports to China and China agreed to further open up its financial services sector to allow wholly foreign-owned firms to provide credit ratings in the country.

In addition, the US Soybean Export Council has said that MOFCOM may make a record commitment to import more than 13.4 million tons of US soybeans when its officials go to Iowa in July, Bloomberg reported on Saturday.

Against this backdrop, the first round of the China-US Diplomatic and Security Dialogue is scheduled to be held in Washington DC on Wednesday. Also, Chinese e-commerce giant Alibaba will host a business forum for small and medium-sized enterprises in Detroit on Tuesday, Qianjiang Evening News reported Friday.

However, the US only cares about its own profits, Huo said, noting that the US is starting to exert pressure on China again after reaping benefits in the 100-day action plan for trade talks.

The US has taken a series of actions to restrict aluminum imports from China over the years, including initiating antidumping and countervailing investigations against Chinese aluminum foil products and requesting consultations at the WTO over China's primary aluminum subsidies, according to a statement from MOFCOM.

"An all-round trade conflict is unlikely between the US and China, but the former will not stop grabbing benefits from China to maintain its position as the global No. 1 economy," Huo said.

Since the two countries' economies are highly complementary, China and the US should cooperate to achieve a win-win result, Wang said, noting that China might take measures like reducing aircraft, soybean and integrated circuit imports if the US imposes tariffs on Chinese aluminum.

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