On March 8, President Trump signed orders on imposing stiff and sweeping new tariffs on imported steel and aluminum. You may have heard about “Section 301” and “Section 232” investigations into steel, aluminum imports and unfair trade practices. So what are they about and why has China been named?
In the past year, the U.S. government has opened several trade investigations that are targeted towards China. You may have heard about “Section 301” and “Section 232” investigations into steel, aluminum imports and unfair trade practices. So what are they about and why has China been named?
The administration is reviewing the results of three major investigations. The first, opened in April 2017 by the Department of Commerce, looks into whether steel imports are a threat to U.S. national security. The second, launched a week later, investigates whether aluminum imports are a similar threat.
How could metal imports affect United States national security? U.S. officials and industry stakeholders have accused China of deliberately over-producing steel and aluminum, leading to a flooded global market. This, they say, has led to the closure of steel and aluminum facilities in the United States. These metals are used in military supplies, such as tanks and aircraft.
The third investigation looks into the Chinese government’s practices related to technology. Some American companies have complained that Chinese businesses have violated intellectual property rules and forced American companies to transfer their technologies to Chinese partners in return for market access. The Chinese government has denied the existence of unfair trade policies, expressing “strong dissatisfaction” with the investigations.
President Trump was given final reports by the Commerce Department on these investigations in January. He could impose quotas, fines or tariffs as a response, such as those he applied recently on imported solar panels and washing machines, which will affect Chinese imports. This action was closely followed by the Chinese government’s decision to an open an investigation into U.S. imports of a grain called sorghum. Is this the start of a trade escalation between the U.S. and China?
Many are concerned that a trade war between the world’s two largest economies would hurt global growth. Cui Tiankai, the Chinese Ambassador to the U.S., said, “Protectionist measures under political and national security excuses will only lead to distortions in the market, missed economic opportunities and a weakening of one’s own competitiveness.” President Trump is expected to announce his response to the investigations soon.