CPA Hopeful that China Tariffs will Increase after 90-Day Delay

December 03, 2018

Trump-Xi deal understandable, but meaningful action doubtful

 President Trump met with Chinese President Xi Xinping at the G20 this past weekend. The two leaders forged a preliminary agreement to delay a planned January increase in US Section 301 tariffs—which were set to rise from 10 percent to 25 percent on $200B of Chinese imports. The Coalition for a Prosperous America (CPA) remains supportive of the administration’s strong action to fundamentally change China’s trade predation, but believes the Communist Party of China merely intends to continue its past pattern of delay, denials, and broken promises.

CPA Chairman Dan DiMicco said, “I respect President Trump’s judgment and instincts because he has consistently recognized and responded to China’s economic aggression. However, China is not to be trusted. I am concerned that this is simply another delaying tactic on the part of Beijing. The US-China rivalry goes beyond trade. The real question is, who will lead the world in the coming decades. Strong, credible, and persistent US policy which lasts for years, not months, is most likely to change behavior and outcomes in the US-China relationship.”

One outcome of the meeting is undoubtedly positive. The White Houses says that China will designate Fentanyl as a “controlled substance,” which enables severe penalties for exporting this harmful drug to the United States. 

The White House also reports that Beijing has committed to purchasing agricultural, energy, and industrial products from the US in order to reduce trade imbalances. Trump and Xi will also negotiate on such overarching issues as commercial espionage, hacking, services trade, coercive technology transfer, and agriculture barriers. And the two have committed to working together on North Korea’s nuclear threat. Additionally, President Xi has expressed willingness to approve a Qualcomm-NXP deal. 

Michael Stumo, CEO of the CPA, views Xi’s pledges at the G20 as a continuation of past practices of delay without resolving fundamental commercial espionage and trade imbalance problems.

Said Stumo, “The administration has laudably recognized that China has long-term goals of eroding America’s global economic, military, and geopolitical position. We are hopeful that President Trump will resist appeasement pressures in response to insufficient future concessions. Let’s look at what Beijing does, not what it says. President Xi has denied wrongdoing with regard to China’s concerted, state-sponsored commercial espionage programs directed against the US. And America’s trade deficit with China continues to increase. As a result, US consumers are funding China’s military, economic, and political rise even as we hamper domestic growth potential. Xi and his compatriots are wisely playing a long game, which perennially includes a slow-walking of negotiations and other delaying tactics. We hope President Trump will follow through with planned tariff increases, consider further tariffs, and move strongly to make the US dollar more globally competitive."

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