Lower lobster tariffs 'unlikely'

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Lower lobster tariffs 'unlikely'

2020-06-08

Source: Global Times   Published: 2020-06-07


China is unlikely to lower tariffs on US lobsters, part of its countermeasures against US tariff hikes, unless the trade dispute initiator moves first on tariff rollbacks, a former senior Chinese trade official said on Sunday.


US President Donald Trump threatened the EU and China with more tariffs at a roundtable event in the US northeastern state of Maine with local fishermen on Friday, according to Bloomberg, in hopes of intimidating the trading partners into reducing tariffs on US lobsters.


White House trade adviser Peter Navarro, named the "lobster king," was put in charge of talks, according to US media reports.


EU-made cars were targeted in Trump's latest tariff threats that also eye unspecified Chinese products, which according to Trump were "something they sell that's very precious to them," according to the Bloomberg report.


"Trump was just saying that, as US-EU negotiations over lobster [duties] have proven futile," He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Sunday.


China's imposition of a 25-percent tariff on US lobster imports was a retaliatory countermeasure against the US' imposing higher tariffs on Chinese imports.


Only if the US rolls back its tariffs on Chinese products will China take an equivalent step toward lowering its duties on US lobsters, He said.


"The US-China trade war resulted in tariffs of 40 percent on US lobsters, causing US fishermen to send products to China through Canada," a process characterized as an "added expense," Fox Business reported on Friday, citing fishermen in Maine, where the US lobster business is mostly based.


The Trump administration has leveled a raft of tariff broadsides against multiple countries including China, and Trump is apparently satisfied with the moves and outcomes, said Gao Lingyun, an expert at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences (CASS).


Gao said that the fresh tariff intimidation is another effort by Trump to shift the blame for his administration's botched COVID-19 response, rising domestic race strife and a struggling economy.


Still, the appointment of Navarro to head the lobster talks is an indication that Trump finally understands the importance of relying on negotiations to resolve tariff disputes, Gao told the Global Times on Sunday.


He said it can't be ruled out that the Trump administration aims to start a new front in bilateral trade disputes, as Trump chose China hawk Navarro instead of US Trade Representative Robert Lighthizer to steer the lobster talks.


Lighthizer said on Thursday that he was "very happy" with the phase one trade pact between the two countries.


Trump told a news conference in the White House Rose Garden on Friday that "I guess I view the trade deal a little bit differently than I did three months ago," Reuters reported.


The CASS expert said there's a strong chance of China lowering tariffs on US lobsters to levels acceptable by both sides, as the lobster trade accounts for only a paltry portion of bilateral trade.


China doesn't want to spark new dispute on the trade front, and US businesses that have taken a battering from tariff hikes also hope for a trade truce, Gao commented.


So long as China keeping purchasing US farm goods, other products and services by the end of 2021, it shouldn't be a concern if China purchases $70 billion this year before buying an additional $130 billion the next year, he said.


The revisions, a reasonable tweak in light of the fallout of the pandemic on flows of people and logistics, won't change the text of the trade deal, the expert went on to say.


In the words of He, however, if the US moves to impose tariffs on Chinese goods, it would surely be detrimental to the Phase One trade deal, and China can be expected to define its countermeasures.


The former senior trade official said the trade issues that dominated China-US relations over the past two years now pale in importance to concerns over a so-called technology "decoupling", geopolitical frictions and the handling of the coronavirus pandemic.


He downplayed chances for a second phase of the trade pact in the foreseeable future.


"The US is too busy containing the pandemic and easing its domestic furor to attend to [any phase two] trade talk, and the Chinese side shouldn't care about it either. [The phase two] agreement will remain out of focus at least until the 2020 US presidential election wraps up," said He.


He Weiwen is a senior fellow at the Chongyang Institute for Financial Studies, Renmin University.