BOFIT Viikkokatsaus / BOFIT Weekly Review 2018/21
A Chinese delegation led by vice premier Liu He met with their American counterparts in Washington DC last week (May 17–18) to assuage bilateral trade tensions. The US team included Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and White House Trade Representative Robert Lighthizer. At the wrap-up of discussions, the parties issued a joint statement that included a promise from China to significantly increase imports of goods and services from the United States (mainly food and energy products) to reduce the US's trade deficit with China. China also reiterated its promises to do a better job protecting intellectual property rights and open up its economy. While the joint statement announced a de facto cease-fire on the trade policy front, it lacked concrete measures. The United States announced it would next send a delegation to China to continue talks and agree on specifics.
The parties committed to refrain from threatened hikes in import tariffs during the talks, as well as a number of other allowances. China separately announced that it was cancelling its temporary import fee on sorghum produced in the US, which took effect in April. In addition, Chinese officials announced at the start of this week that they were reducing car import duties from 25 % to 15 % from the beginning of July. Media reports said the US was planning to lift its ban on component sales to Chinese ZTE.
It remains unclear what happens to tariffs already in force. These include general anti-dumping duties imposed by the US on solar panels, washing machines and steel and aluminium products, as well as Chinese duties imposed this month on e.g. certain American food products, steel pipes and recycled aluminium. The importance of these import tariffs relative to the US-China trade overall are marginal.