A “Retreat from Commitments” Leads to a Quick Jump in U.S. Import Duties on China

Man wearing burgundy suit and bowler hat juggles three red balls
China trade up in the air
May 10, 2019
WASHINGTON, DC -- It took only days for the Office of the U.S. Trade Representative (USTR) to follow through on President Trump’s weekend tweet expressing frustration over apparent backsliding by China after months of trade negotiations, to increase U.S. duties today on $200 billion of imports from China, including rice.  Published in yesterday’s Federal Register, USTR said that “…China has chosen to retreat from specific commitments agreed to in earlier rounds (of negotiations)” as the reason for the increase in duties from the current 10 percent to 25 percent.

“The U.S. rice industry has relied on the clear-eyed and strong approach of the Trump Administration towards our market access goal of opening the China market in the broader bilateral U.S.-China trade negotiations,” said Bobby Hanks, chair of the USA Rice International Trade Policy Committee and a Louisiana miller.  “The Administration’s efforts have gotten us legal access to China, but we have yet to ship, while China continues to displace domestic rice in Puerto Rico, so an increase in import duties to 25 percent is welcome and a move we support.”       

A high level delegation from China is currently in Washington, DC, for what many viewed were to be concluding discussions in preparation for a summit meeting between Trump and China’s President Xi to conclude a comprehensive trade agreement.  However, media reports indicated that Chinese officials made substantive edits to the agreement, characterized by USTR Robert Lighthizer in the press as “an erosion of commitments by China” that resulted in the U.S. increase in import duties.  Negotiations continue as this edition of the USA Rice Daily is published.

“Rice and the rest of U.S. agriculture can only benefit from a comprehensive trade agreement with China that stresses trade over tariffs.   But that can only come when China lives up to the commitments it has negotiated and can be held accountable,” concluded Hanks.

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