Date
20 July 2019
US Trade Representative Robert Lighthizer testifies on Wednesday before a House Ways and Means Committee hearing in Washington on US-China trade. Photo: Reuters
US Trade Representative Robert Lighthizer testifies on Wednesday before a House Ways and Means Committee hearing in Washington on US-China trade. Photo: Reuters

US needs to maintain tariff threat against China: Lighthizer

The US will need to maintain the threat of tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end the current trade row, according to US Trade Representative (USTR) Robert Lighthizer.

President Donald Trump’s chief trade negotiator told lawmakers on Wednesday that much work is still needed to nail down a US-China trade agreement, including working out how it will be enforced, Reuters reports.

“If we can complete this effort – and again I say if … we might be able to have an agreement that helps us turn the corner in our economic relationship with China,” Lighthizer said in testimony to the US House Ways and Means Committee.

Lighthizer said USTR was taking legal steps to implement Trump’s decision on Sunday to delay a tariff increase on more than US$200 billion worth of Chinese goods that had been scheduled for Friday.

But USTR later clarified in a statement that it was not abandoning the threat of increasing the tariffs to 25 percent from 10 percent. It said a Federal Register notice would be published this week that would suspend the increase “until further notice.”

Lighthizer detailed a long road ahead to resolve US China trade issues, and said that tariffs would remain an important tool to push China to make structural policy changes sought by Trump and lawmakers.

“The reality is this is a challenge that will go on for a long, long time,” Lighthizer said. He earlier said he “is not foolish enough” to believe that a single negotiation will change the increasingly sour bilateral trade relationship.

“If there is disagreement at my level, the US would expect to act proportionately but unilaterally,” Lighthizer added.

A perennial threat of tariffs would be disappointing news for industry, which is hoping to see an end to the trade war uncertainty that has paralyzed China investment decisions, Reuters noted.

Lighthizer’s comments came as data released Wednesday showed the US goods trade deficit widened sharply in December.

The goods trade deficit jumped 12.8 percent to US$79.5 billion in December. Exports fell 2.8 percent amid steep declines in shipments of foods, industrial supplies and capital goods. Imports increased 2.4 percent driven by food and capital and consumer goods.

Other data from the Commerce Department showed new orders for US-made goods barely rose in December and business spending on equipment was much weaker than previously thought, pointing to a softening in manufacturing activity.

The Commerce Department will release the fourth-quarter 2018 GDP report on Thursday.

Growth estimates for the quarter are currently around a 2.0 percent annualized rate. In the preceding three months, the US economy grew at a 3.4 percent pace.

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CG/RC

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