U.S. President Joe Biden and Chinese President Xi Jinping before a meeting during Asia-Pacific Economic Cooperation Leaders Week in Woodside, California, November 15, 2023.
Brendan Smialowski | Afp | Getty Images
China said it “strongly rejects” the U.S. investigation into its maritime, logistics and shipbuilding industries, calling the move a “mistake at that.”
In an official statement late Wednesday, China’s Commerce Ministry said the U.S. provided hundreds of billions of dollars in “discriminatory” subsidies to its domestic industries but “accused China of using so-called ‘non-market practices.’
“In fact, the development of China’s industry is the result of enterprises’ technological innovation and active participation in market competition,” the Chinese ministry said.
On Wednesday, the U.S. Trade Representative’s office launched an investigation into China’s shipping, logistics and shipbuilding industries, alleging that Beijing has used “unfair, non-market-oriented policies and practices” to dominate those sectors. Under the Trade Act of 1974, Section 301 aims to combat unfair practices by foreign governments that affect U.S. commerce.
“By launching a new investigation under Section 301, the United States is making one mistake after another,” China’s Commerce Ministry said.
Beijing called on the US to “respect multilateral rules” and promised to “take all necessary steps to resolutely defend its rights and interests.”
The investigation comes as five national unions launched a petition on March 12 calling on the U.S. to investigate the policies and practices of China’s shipping, logistics and shipbuilding sectors.
U.S. Trade Representative and Ambassador Katherine Tai has vowed to launch a “full and thorough investigation into union concerns.”
“The allegations reflect what we have already seen in other sectors [China] uses a wide range of non-market policies and practices to undermine fair competition and dominate the market, both in China and globally,” she said, according to the USTR statement.
President Joe Biden has also called on the USTR to triple tariffs on Chinese steel and aluminum imports to protect American industry.
“Chinese policies and subsidies to the domestic steel and aluminum industries mean that high-quality U.S. products are being undercut by artificially low-priced Chinese alternatives made with higher emissions,” the White House said in a statement.
In an address to union members in Pittsburgh on Wednesday, Biden accused China of “fraud” in its steel trade practices.
“They don’t compete. They are cheating,” he said, adding, “We have seen the damage here in America.”
“The bottom line is that I want fair competition with China, not conflict.”
Deborah Elms, director of trade policy at the Hinrich Foundation, said the Section 301 investigation could be more significant than Biden’s call for tariff increases on Chinese steel and aluminum imports.
The total amount of Chinese steel in the U.S. market is less than 1%, Elms told CNBC’s “Capital Connection” on Thursday.
She said launching a Section 301 investigation into shipbuilding “potentially becomes a bigger problem.”
“This could be much more significant because it sets the stage for further retaliation by the U.S. against China and then potentially by China against the U.S.,” Elms said.
“We are facing a very exciting election season, both parties [Democrats and Republicans] are competing in the US to see who can be the toughest against China.”
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2024-04-18 05:56:00
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