 |
| China may be the main "belligerent" identified by the US, but it's hardly the only one. |
Trump and the Chinese government not being particularly known for their communicative openness and transparency, there is some confusion as to whether the US-China trade war is about to de-escalate or otherwise after Trump-Xi talks at the recently concluded G-20 meeting in Argentina. What's going to happen with regard to these two countries?
Beats me, pal. Lest you think that China is the only victim of Trump's anti-trade mentality, rest assured that the rest of the world has been subject to aggressive action from the US government at Trump's obvious behest. But before we get to that, let's
review what kinds of actions countries have typically used to sanction others' "unfair" trade practices:
A tariff is a tax on a foreign product designed to protect domestic producers in an effort to boost local economies. But under international trade laws, the US can't just implement them willy-nilly, they need to provide a reason why the tariff is necessary and investigate it fully. Until recently, the vast majority of US tariffs were justified as countervailing and antidumping duties.
- Countervailing duties level the playing field when a foreign industry has been unfairly subsidised
- Antidumping duties level the playing field when a foreign industry has been flooding the US market with its products
Not all investigations lead to tariffs - at some point during the process, the US may decide they don't have grounds to be implemented. But many do.
While we keep hearing about China all the time, note that it's practically everyone else also being hit by Trump's trade angst:
Under President Trump, the Department of Commerce has begun 122 investigations into anti-dumping/countervailing duties. These tariffs have targeted all corners of the globe, reaching 31 countries in total and affecting some $12bn (£9.4bn) in imports. China has borne the brunt of US scrutiny, with about 40% of countervailing/antidumping investigations targeting Chinese products ranging from aluminium alloy to rubber bands to silk ribbons. Other countries have found themselves in Mr Trump's crosshairs as well.
Aside from China, the countries hit by US trade actions range far and wide:
A far-reaching investigation into citric acid touched three continents, with tariffs issued for Belgium, Colombia and Thailand. The chemical compound mimics the sour tang of lemons and is used in a large amount of common candies and drinks, from Sour Patch Kids to 7Up...
Another massive investigation into biodiesel from Argentina and Indonesia led to tariffs being issued on $1.5bn of imports. The fuel, which is made from plants, is used in diesel cars and lorries, as well as airplanes and trains. The market has huge growth potential in the US, which is a major grower of corn and soybeans, and the tariffs could ostensibly help grow the industry.
Whereas American companies had to tell the government to investigate foreigner's alleged violations of trade rules, the Department of Commerce under Trump is now attacking all and sundry others even without corporate complaints. What's more, he's using traditionally taboo reasons for imposing sanctions since they give him more leeway--"national security" concerns being foremost of these against such national security "threats" like Canada, Mexico, etc.
And in a significant change in protocol, officials are no longer waiting for companies to petition for help. Last November, the Department of Commerce self-initiated investigations in Chinese common alloy aluminium.
It was the first time the department acted on its own regarding antidumping or countervailing duties, without a complaint from industry, in decades, and a sign of a shift in the department's policy under the new administration.
"[President Trump] isn't willing to wait for companies to come forward. He wants to do it himself, he wants to have the government decide," says Chad Bown, a senior fellow at the Peterson Institute for International Economics.
"So he starts self-initiating cases but also... he says we're going to start using other laws where there are much more presidential discretion." But by far the biggest shift in US trade policy has been Trump's willingness to buck with tradition if it will let him get tariffs through faster.
Rather than go through lengthy antidumping/countervailing investigations - and risk his tariffs being overturned - Trump has introduced hundreds of billions of tariffs under little-used aspects of trade law.
The upshot here is that even if US-China trade relations improve somewhat, there are so many other countries being targeted that it's hardly a cessation of the trade wars Trump is busy engaging in against practically the entire world.
