No Thaw In Tariffs After U.S.-China Meetings

A NEW WAY TO FIGHT CHINESE IMPORTS: U.S. Trade Representative Katherine Tai has called on Congress to provide new tools to fight against unfair trade from China. A new report from a technology think tank says lawmakers should do that by revamping a 72-year-old law that empowers the U.S. International Trade Commission to bar imports.

“It is time for the U.S. government to add an assertive tool of trade self-defense against China,” Rob Atkinson, president of the Information Technology and Innovation Foundation, wrote. “The focus should be on banning imports from Chinese firms … where there is a reasonable assurance that the firms benefited from significantly unfair economic, technology, trade, or other practices that give them an unfair advantage in the U.S. market.”

Specifically: Atkinson suggested Congress make a number of changes to the Section 337 statute in the 1930 Tariff Act that has primarily been used in recent years to adjudicate patent disputes. Those include making it clear that the ITC can also issue “exclusion orders” to bar imports because of unfair fair foreign trade practices, he said in an interview.

“As long as [Chinese President] Xi Jinping is in power, we cannot change Chinese policy. They're going to keep doing what they do, which is unfair, distortive, predatory,” Atkinson said. It’s also unlikely that there is enough political will in Congress to provide funding for a robust U.S. industrial policy, so the United States needs to find ways to “make it less profitable for their firms to benefit” from unfair Chinese government practices, he added.

Better than a ‘blunderbuss’: Former President Donald Trump imposed tariffs ranging from 7.5 percent to 25 percent on hundreds of billions of dollars of Chinese goods. But the problem with that approach is “that it uses blunderbuss rather than a rifle shot,” Atkinson wrote. A drop in the value of China’s currency against the dollar can also blunt the impact of tariffs or anti-dumping duties, while an import ban is absolute, he said.

The proposed reforms should also make it clear that “any agency of government can file a complaint to initiate a Section 337 unfair trade investigation,” rather than requiring the cases to be brought by companies at their own expense, Atkinson said. Congress also should appropriate more money for the ITC to conduct such investigations and for U.S. Customs and Border Protection to enforce exclusion orders, he said.

Capitol Hill interest: ITIF is planning an event with Sens. Mark Warner (D-Va.) and John Cornyn (R-Texas) — both of whom sit on the Finance Subcommittee on International Trade, Customs, and Global Competitiveness — next Monday to tout the report.