Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Q. Are there any signs that the escalating trade dispute between the United States and China prompted by the U.S. 301 action will be resolved soon?

A. Unfortunately, the answer is no. It appears that both sides have now dug in for a prolonged trade fight. Last week President Trump announced that it would be imposing an additional 10% tariff on about $200 billion of Chinese imports, effective September 24, and that the additional tariff on those goods would be increased to 25% on January 1. In the announcement, the President also threatened to impose tariffs on $267 billion of additional Chinese imports if China retaliated.

As expected, China immediately announced it was imposing additional tariffs of up to 10% on $60 billion of U.S. imports. This is in addition to the 25% tariff both parties had imposed on roughly $50 billion of each other’s goods earlier this year. 

It remains to be seen if and when the President will follow through on his threat to impose tariffs on another $267 billion of Chinese exports. If carried out, this would cover virtually all Chinese exports to the U.S. It is also not clear how China would respond to such an action. But many U.S. companies fear that China could turn to other actions besides tariffs to inflict economic pain on them, such as slowing down customs processing times and imposing tougher regulatory requirements for U.S. goods.

It had been hoped that these trade actions would lead to bilateral negotiations to resolve the underlying complaints in the 301 action by the U.S. about numerous unfair trade policies and practices relating to U.S. technology and intellectual property rights. The U.S. is also looking to address the significant trade deficit that China has with the U.S. 

It had appeared that progress was being made in talks between senior U.S. and Chinese trade officials in Washington in May. But unfortunately, the talks broke off. No high-level talks have been held since June and none seem to be on the horizon. Sadly, global traders will continue to face increased tariffs and uncertain times for the foreseeable future as the bilateral trade war continues.