Office of the US Trade Representative has been reviewing the need for and impact of the additional duties since May 2022. The US Congress has pushed the next deadline for passage of bill that will keep the federal government funded to November 18. 

A decision on keeping additional tariffs on Chinese goods will likely be made by the end of the year, although a federal government shutdown could lead to delays, according to Washington’s top trade official.

“We’re still in the process of a very robust inter-agency deliberation. Obviously, this is an area where the comments we solicited from the public are extremely important to us,” US Trade Representative Katherine Tai said on Tuesday.

“I’m hopeful that we will be able to conclude the process by the end of the year,” she said, adding that a government shutdown – which Congress narrowly averted on September 30, pushing the deadline to November 18 – “the pace of what we do may be impacted across the board.”

After an investigation by the Office of the US Trade Representative (USTR) found China guilty of “unfair trade practices” in 2018, former president Donald Trump imposed the tariffs in 2018 and 2019 on Chinese imports worth more than US$300 billion. He also expected the extra taxes to reduce US-China trade deficit.

Since taking office in January 2021, President Joe Biden has kept most of the tariffs in place in favour of a trade policy that focuses on rebuilding American manufacturing rather than pursuing cheap foreign goods.

The USTR began reviewing the need for and impact of the additional duties in May 2022.

Categories such as some car parts, chemicals and medical products like face masks, examination gloves and hand sanitising wipes remain excluded from the tariffs until December 31.

“As part of this review, we are considering the existing tariffs structure and how to make the tariffs more strategic in light of impacts on sectors of the US economy as well [as] the goal of increasing domestic manufacturing,” Tai’s office said in July in response to inquiries from the US Senate Finance Committee.

In 2019, Moody’s Analytics estimated that the US-China trade war had led to the loss of about 300,000 American jobs, while a New York Federal Reserve study said the tariffs resulted in “approximately US$1.7 trillion in lost market capitalisation for firms through investment slowdowns”.

The US goods trade deficit with China was more than US$300 billion in 2022, an 8.3 per cent increase over 2021.

Source: SCMP