Comments on the Biden Administration's Proposed New Tariffs on Imports from China
Steve Charnovitz
Docket USTR-2024-0007
USTR-2024-0007-00106921
6 June 2024
The proposed United States (US) tariffs modifications noted in the Federal Register on 28 May 2024 undermine both international law and United States-China relations. Therefore, the counterproductive existing tariffs on China (Lists 1-4) should be modified by terminating them.
On 15 September 2020, a World Trade Organization (WTO) panel ruled that the Section 301 tariffs violate the fundamental law of the General Agreement on Tariffs and Trade (GATT), in particular Articles I and II. The United States should uphold and respect international law, not be a casual violator of it. When the US violates conventional international law, it signals a green light to other scofflaw countries that they do not need to take their international law obligations seriously.
As of June 2024, the well-reasoned WTO panel decision has not yet been adopted by the WTO judiciary. That's because the US has engaged in a bad faith appeal to an Appellate Body that was out of service at that time, and has remained out of service since January 2021 due to resistance by the Biden Administration to reconstituting the WTO appellate court.
Yet in the second decade of the 21st century, the importance of international courts and tribunals to managing conflict is manifest. The need for the rule of law is especially vital in the multilateral trading system when large economies like the US partake in persistent protectionism in violation of WTO rules.
In using Section 301 against China, the US is engaging in discriminatory trade policies. Before the WTO court, the US sought to justify this discrimination by claiming that its discrimination against China protected US public morals. The panel rightly dismissed this fatuous argument on legal grounds. A fuller analysis of the effects of the tariffs would show that federal discriminatory actions against the Chinese people in China undermine US morals. From the time of the 1882 Chinese Exclusion Act to the present, the US government has too often treated the Chinese people unfairly. The continuing legacy of US racism demoralizes the American public.
Employing WTO-illegal trade sanctions against China is especially counterproductive now when achieving cooperation from China is so important in dealing with aggression by the Russian Federation, nuclear threats by several totalitarian countries, worsening climate change, and unstable relations between WTO members China and Taiwan. Rather than poke China in the eye again with aggressive US unilateralism, the US should be looking for ways to improve relations with China. Modifying the Section 301 tariffs downward — or better yet withdrawing them entirely — would be a good first step toward US foreign policy sanity.
The Request for Comments asks whether higher tariffs on China will be effective in counteracting the actions China that China is alleged to be undertaking regarding technology transfer, intellectual property, and innovation. As I pointed out years ago (see "Grading Trump's China Strategy," 2019 European Yearbook of International Economic Law, 217-256), tariffs will be poor substitutes for efficient direct responses to domestic or foreign policies by China that the US finds objectionable. For example, if it is true that "China has ... become more aggressive, particularly through cyber intrusions and cybertheft, in its attempts to acquire and absorb foreign technology," the solution to that to better enforce US law against those individuals doing such practices.
The Request for Comments asks about the effect of higher US tariffs on the US economy and consumers. Obviously, tariffs create economic distortions that cannot possibly be welfare enhancing. Moreover, as Ambrose Bierce pointed out in 1911, tariffs are "taxes on imports designed to protect the domestic producer against the greed of his consumer." US consumers will continue to suffer from higher prices directly caused by the Trump-Biden tariffs on China.
The Request for Comments asks whether US tariffs should be higher on facemasks, medical gloves, syringes and needles. The answer is no they should not because these public health products should be available at as low a cost as possible. It is troubling that USTR would even ask this question at a time when the US is still recovering from its worst pandemic since 1918 and may be facing a new bird flu pandemic for which the US remains woefully underprepared.
