According to a statement posted on the website of the Ministry of Finance, approved by the State Council, the Customs Tariff Commission of the State Council has decided to suspend starting from April 2, 2018 the tariff concession obligations for some imported products originating in the United States.
The news came that on March 8, 2018, President Trump of the United States signed a memorandum which affirmed that the imported steel and aluminum products threatened the national security of the United States and decided to impose tariffs on imported steel and aluminum products (i.e. 232 measure) from March 23, 2018. The 232 measure violates relevant rules of the WTO and does not conform to the "security exception" clause and actually constitutes a protection measure. That measure went into effect on March 23, 2018, which has seriously undermined China’s interests. In order to protect China’s interests and balance the losses caused by the 232 measure of the United States to China, China has suspended starting from April 2, 2018 the tariff concessions on 128 items of 7 categories of imported products originating in the United States.
First, 120 items of imported products such as fruit and related products originating in the United States are suspended from tariff concession obligations and a tariff of 15% is imposed on these items on the basis of the current applicable tariff rate.
Second, 8 items of imported pork and related products originating in the United States are suspended from tariff concession obligations and a tariff of 25% is imposed on these items on the basis of the current applicable tariff rate.
Third, the current bonded and tax relief policy will remain unchanged.
It is reported that on March 23 the Ministry of Commerce issued a list of items for suspending tariff concessions aiming at the 232 measure for the import of steel and aluminum in the US and solicited public opinions. The comment period ended on March 31. During the period of comment, a large number of people supported the measures and product list through telephone, e-mail and other ways and indorsed the government to take measures to safeguard the interests of the state and industry and some people even suggested stronger measures. After evaluation, it is decided to implement the above measures for 128 items of products imported from the US.
The Chinese side believes that the US side abused the “security exception” clause of the WTO by taking the 232 measure for import of steel and aluminum products and constituted protection measures in essence. Furthermore, its measures target just a small number of countries, seriously violate the principle of non discrimination which is the cornerstone of the multilateral trade system and seriously invade the interests of the Chinese side. According to the “Agreement on Safeguards”, the Chinese side made a request to the US side on March 26 through the WTO for discussion on the trade compensation, but the US side declined to respond. In view of the fact that it’s impossible for the two sides to reach a consensus, the Chinese side notified the WTO on March 29 of the list of suspension of concession and decided to impose tariffs on some of the products imported from the United States in order to balance the loss of interest to the Chinese side caused by the 232 measure of the US side.
As a WTO member, China has the legitimate right to suspend some former obligations to the United States. It is hoped that the US will withdraw as soon as possible the measures violating the WTO rules so that the trade of relevant products between China and the US will return to the normal track. As the two largest economies in the world, cooperation is the only valid option for China and the United Sates. The two sides should address the concerns of both sides through dialogue and consultation and realize common development and work to prevent more harm to the broader picture of the Sino-US cooperation.