Tariff cannot ease ‘symptoms’ of US deficit

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By CGTN’s Wang Yue

The US administration is now targeting all of its major trading partners for violating free trade principles.

Given the series of trade disputes recently, an article written by US Commerce Secretary Wilbur Ross earlier this month got received mixed reviews domestically. While some thought it carried a parochial and nationalistic tone, others say Ross's claims were factually accurate.

In response to Ross's claim that China needs to practice what it preaches, experts say China’s trade tariffs are reasonable and cannot ease the “symptoms” of US trade deficit.

China’s tariff level meets the WTO’s requirement for developing countries

Ross said in the article that China’s tariffs are higher than those of the US in 20 of the 22 major categories of goods.

However, what he didn’t say in the article was that China’s tariff level is lower than the WTO requirement for developing countries.

“China’s average tariff level has plummeted from 18.9 percent to 9.8 percent. It is lower than the WTO requirement for the developing country members,” said Zhang Monan, a senior fellow at the China Center for International Economic Exchanges (CCIEE).

Li Yong, a senior fellow at the China Association of International Trade, added that the tariff peak should also be taken into the consideration, as tariff peaks are usually designed to protect local industry.

“For example, in the US, the tariff peaks for aquatic products, apparel and footwear are about 32 percent, 35 percent and 55 percent respectively, while in China, the tariff peaks (for the same categories) are 23 percent, 25 percent and 25 percent respectively. The average (tariff) just means the general level of tariffs, but you need to look further into the details,” Li noted.

VCG Photo

Trade tariffs cannot address trade deficit

Ross also blamed American trade deficit on trade tariffs, saying that until it makes better deals with its trading partners, the US will never know precisely how much of its deficit in goods is due to such measures. However, he added that these barriers are responsible for a significant portion of the US's current trade imbalance.

But Li said the change in tariff level cannot remove the trade deficit or increase exports directly.

“For example, the US has an FTA with South Korea, which significantly reduces tariff levels from South Korea. But that didn’t really help increase US exports to South Korea,” Li commented.

Earlier this year, China opened its doors to US beef after an absence of 14 years. And last month, China agreed to allow imports of American rice for the first time ever.

Meanwhile, China announced in 2015 that the country would impose zero import tax on 97 percent of products from eight of the world's least-developed countries that have diplomatic relations with China.

“China is also trying to make regional FTAs, or FTAs with individual countries. And most important of all, China is giving zero-tariffs to less-developed countries," said Li. "Taking all this into consideration, I think the general level of China’s tariff will be lower.”