US-China trade war
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The business community has been caught in the middle of the US-China trade war in recent years. Photo: EPA-EFE

Remove trade war tariffs ahead of Joe Biden-Xi Jinping meeting, US business groups urge

  • Two dozen American business associations call on the US government to remove tariffs and broaden exemptions
  • US-China Business Council-led group says the duties continue to cause economic harm to US businesses, farmers, workers, and families

Two dozen American business associations sent a letter to senior US trade officials on Friday, urging the White House to reduce tariffs on Chinese goods and broaden the scope of import duty exemptions to restore the competitiveness of US businesses.

In the letter, addressed to US trade representative Katherine Tai and Treasury Secretary Janet Yellen, the group urged the administration to remove the tariffs and requested “immediate action to significantly broaden the tariff exclusion process to provide additional relief to Americans”.

“[Tariffs] continue to disproportionately cause economic harm to US businesses, farmers, workers, and families,” said the associations, which were led by the US-China Business Council (USCBC), a non-profit trade organisation representing more than 200 US companies.

The letter, signed by 24 other associations, including the American Association of Exporters and Importers, the US Chamber of Commerce, and the Semiconductor Industry Association, was sent just days before this week’s much-anticipated virtual meeting between US President Joe Biden and Chinese President Xi Jinping.

With specific recommendations, the coalition said it aimed to help the US to focus on its trade policy, which would improve US-China trade relations for the benefit of American workers, farmers, businesses, and families.

Xi Jinping and Joe Biden will speak this week, with the US-China trade war among the topics under discussion. Photo: AFP

The US has tariffs of up to 25 per cent on more than US$300 billion worth of Chinese imported goods. The tariffs have cost American importers more than US$110 billion, of which US$40 billion has been incurred under the Biden administration, according to the letter.

Certain products on the list have been exempt from the import duties, and the trade representative’s office is reviewing the list of goods that should continue to receive such waivers.

While acknowledging the USTR’s effort to reassess the tariffs for potential exclusions, the group said “the scope and retroactivity are far too narrow given the ongoing negative effects from the tariffs and their inflationary pressures”.

The business community has been caught in the middle of the US-China trade war in recent years. Biden’s continuing hardline China policy has frustrated some big corporations that had hoped for an opportunity to ratchet down tensions between the two countries with a change of administration.

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The associations, which represent industries including agriculture, chemistry, medical tech, retail, insurers and information technology, however, have acknowledged the need to address market structure issues with China to ensure American businesses can compete fairly, as well as the need to safeguard American national security.

In recent weeks, the US has resumed talks with China to hold Beijing accountable for its unfulfilled commitment to purchase more American goods under the phase one trade deal signed nearly two years ago.

The USCBC-led coalition said in the letter that it “supported the administration’s initial China trade policy priorities, including enforcing China’s existing commitments”. It also stressed its support for the US to prioritise “making progress on outstanding structural challenges in China that fall outside the scope of the phase one agreement”.

They included addressing China’s discriminatory regulations and in areas of intellectual property, services, and competition policy, as well as digital restrictions, and state subsidies, the group said.

American businesses agreed that “forced labour and other human rights abuses should have no place in supply chains, and our members work to prevent forced labour in supply chains in China and around the world”, the group said.