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At the center of the U.S.-China trade tensions are the WTO investigations concerning billions of dollars worth of products. In the past ten days, the U.S. Department of Commerce held hearings on both cases. We spoke to two Chinese lawyers who attended the hearings in Washington D.C.
In a global business environment, no country exists in solitude. Ever since the 232 and 301 investigations began, concern has grown among American companies that rely on business with China -- despite claims the investigations are meant to help them.
CAI KAIMING SENIOR PARTNER, DENTONS "In the hearing, most of the witnesses were urging for the termination of the 232 investigation. Among the 44 witnesses in the hearing, 43 of them were in opposition to 232 investigation."
Cai also mentioned more than 140 congressmen wrote a letter to Commerce Secretary Wilbur Ross expressing concerns about a potential negative impact. However, during the hearing, what really concerned Cai Kaiming, was how U.S. officials treated Chinese versus American companies.
CAI KAIMING SENIOR PARTNER, DENTONS "To be honest, it is not feasible to compare U.S. companies with Chinese companies in the testimony, because very few number of Chinese companies participated in the hearing. During the hearing, it is apparent that the U.S. officials responded to the U.S. witnesses with more empathy and understanding. It looks like maybe U.S. testimony is more persuasive to the U.S. officials."
Threatening to investigate and impose tariffs is not a new tactic from the U.S. Such threats related to Section 301 against China can be traced back to the early 1990s. None has materialized in over a decade. But that might change.
SUN LEI PARTNER, DENTONS "Time is different. China is so big. The U.S. just feels threatened, real threat from China. So they take the actual actions. Right? It's different. Time is different. I think for the 232, because China is not the target, we can make, to some extent, hope or something. But for the 301, we need to be prepared to accept an environment in which there are lots of tariffs on us. We need to be prepared."
The public comment period of the second round 301 investigation will end on July 31st and the final tariff list will be released soon after. It's just the latest in the ongoing trade war between the world's two largest economies.