Less than 10 days after U.S. Treasury Secretary Janet Yellen concluded her visit to China, the U.S. once again wielded the stick of tariffs against China. According to the global network, the Office of the United States Trade Representative officially announced on April 17 local time that it would launch a "301" investigation into China's maritime, logistics and shipbuilding industries.
U.S. Trade Representative Katherine Tai
The so-called "Section 301" investigation is actually a tool for the United States to exercise long-arm jurisdiction over other countries, under which the United States Trade Representative can initiate an investigation into the trade behavior of other countries and can take four measures in response.
These are the suspension or withdrawal of concessions under trade agreements, restrictions on market access in the services sector, the imposition of punitive tariffs on imports from other countries, and the demand for compensation for US losses after reaching an agreement with the other country.
As long as the United States believes that the relevant practices of other countries have "harmed the interests of the United States," it can initiate a "Section 301 investigation" against the other side, but as for how the criteria are defined, it is entirely up to the United States to decide.
Ministry of Commerce of the People's Republic of China
Not counting this time, since 1991, the United States has launched six "Section 301 investigations" against China, and during the Trump era, the United States used Section 301 of the Trade Act of 1974 to impose punitive tariffs on hundreds of billions of dollars of goods imported from China, but the result was that American companies and consumers bear a lot of losses.
According to statistics, after the United States launched the "trade war" against China, it not only caused American companies to lose $1.7 trillion in market value, but also caused the United States to lose nearly 250,000 jobs, and the average household expenditure increased by $1,300. At the same time, the U.S. trade deficit in goods with China is rising.
This fully shows that the "trade war" initiated by the United States has not only not slowed down the pace of China's economic development, but has stuck to the United States like a "boomerang." Now US President Joe Biden wants to follow his predecessor's practice and triple tariffs on steel and aluminum imports from China, which will only continue to increase the burden on American companies.
U.S. President Joe Biden
Knowing that this move could harm the US economy, there is only one answer to why the Biden administration insists on going its own way, and that is to build momentum for the upcoming US election and win more votes from the American working class, so it has pointed the finger at China.
Biden spoke to local steelworkers at an event held in Pittsburgh on the 17th, claiming that he would take more trade measures to China, including raising import tariffs on Chinese steel and aluminum products, raising the original average tariff of 7.5% to 25%, and said that this move is to "protect the interests of American workers" and ensure "fair competition", and said that the United States does not want to conflict with China.
Biden's remarks in Pittsburgh, known as the "steel capital" of the United States, are nothing more than an attempt to show voters his "tough on China" attitude, so as to attract some of the votes that were originally divided by Trump, but it is clear that many of the current practices in the United States have gone beyond the scope of "fair competition".
China steel and aluminum products
The launch of the "Section 301 investigation" against China's shipbuilding industry is more of a political move than an economic issue, because not long ago US Treasury Secretary Janet Yellen personally said during her visit to China that the United States does not want to "decouple" from China.
But now, as soon as Yellen left China, the United States can't wait to wield the tariff stick against China, which is not a posture to seek cooperation. Even on the 16th, the Sino-US working group held its fourth working meeting in Washington to communicate on economic and trade issues.
On April 17, the spokesperson of the Ministry of Commerce of China expressed its attitude on the US launch of a Section 301 investigation against China, pointing out that the US move was based on domestic political needs and was completely wrong, stressing that China firmly opposes this and will take all necessary measures to defend its legitimate rights and interests.
China reduced its holdings of U.S. bonds
In addition to the verbal warnings, there is another move by the Chinese side that deserves attention. On April 17, the U.S. Treasury Department released data from the latest report on international capital flows, which showed that while the United Kingdom and Japan chose to increase their holdings of U.S. bonds, China continued to sell in February, reducing its holdings of U.S. bonds by $22.7 billion, leaving its holdings at $775 billion.
When the United States does not respect China's sovereignty and dignity and harms China's economic interests, we adjust our foreign exchange reserves based on the need to safeguard its own right to development, which will also bring certain pressure to the United States, which is currently heavily indebted.