Investigation may harm trade relationship
The U.S. investigation into the effects of aluminum and steel imports on the country's national security is an excuse to expand trade protectionism through the use of tariffs, and this may harm its seemingly improved trade and economic relationship with China, experts noted.
The comments came after the U.S. government, under the rarely used Section 232 of the Trade Expansion Act of 1962, launched two separate probes in April into whether foreign aluminum and steel products arriving in the U.S. threaten to impair U.S. security.
The act allows the president to adjust imports with measures including the use of tariffs, if excessive imports are found to be threatening U.S. national security.
"I look forward to reading the 232 analysis of steel and aluminum to be released in June. Will take major action if necessary," U.S. President Donald Trump tweeted on May 28.
But experts said that aluminum and steel imports pose no threat to U.S. national security, and that the country is using it as an excuse.
The launch of the Section 232 investigation is actually a form of trade protectionism, a crucial factor that curbs trade between China and the U.S., according to Wang Jun, director of the Department of Information at the China Center for International Economic Exchanges.
"Primary metal manufacturing is a low-end industry that the U.S. transferred overseas years ago. It is also the result of global resource allocation and the country's high labor costs. Hence, it does not pose any threat to the U.S.," Wang told the Global Times Sunday.
The investigation may be an alternative to a so-called border adjustment tax on imports, which Trump previously proposed, and its real purpose is to restrict imports through the use of tariffs, Huo Jianguo, vice chairman of the China Society for WTO Studies, told the Global Times on Sunday.
"We call on the U.S. side to fulfill its responsibility to maintain the multilateral trade order, and we hope that its actions and measures are in line with the relevant rules of the WTO," Ministry of Commerce (MOFCOM) spokesperson Sun Jiwen told a briefing in April.
Although the Sino-U.S. trade and economic relationship seems to be a little improved after a meeting between Chinese President Xi Jinping and U.S. President Donald Trump in April, some tension persists as the U.S. attempts to take action to protect its own economy and reduce its trade deficit with China, experts said.
As part of the China-U.S. 100-day action plan announced in May, the two countries finalized details on June 12 to allow the U.S. to begin beef exports to China and China agreed to further open up its financial services sector to allow wholly foreign-owned firms to provide credit ratings in the country.
In addition, the U.S. Soybean Export Council has said that MOFCOM may make a record commitment to import more than 13.4 million tons of U.S. soybeans when its officials go to Iowa in July, Bloomberg reported on Saturday.
Against this backdrop, the first round of the China-U.S. Diplomatic and Security Dialogue is scheduled to be held in Washington DC on Wednesday. Also, Chinese e-commerce giant Alibaba will host a business forum for small and medium-sized enterprises in Detroit on Tuesday, Qianjiang Evening News reported Friday.
However, the U.S. only cares about its own profits, Huo said, noting that the U.S. is starting to exert pressure on China again after reaping benefits in the 100-day action plan for trade talks.
The U.S. has taken a series of actions to restrict aluminum imports from China over the years, including initiating antidumping and countervailing investigations against Chinese aluminum foil products and requesting consultations at the WTO over China's primary aluminum subsidies, according to a statement from MOFCOM.
"An all-round trade conflict is unlikely between the U.S. and China, but the former will not stop grabbing benefits from China to maintain its position as the global No. 1 economy," Huo said.
Since the two countries' economies are highly complementary, China and the U.S. should cooperate to achieve a win-win result, Wang said, noting that China might take measures like reducing aircraft, soybean and integrated circuit imports if the U.S. imposes tariffs on Chinese aluminum.