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Trump’s steel and aluminum tariffs did not exempt China

Trump’s steel and aluminum tariffs did not exempt China
Issue Time:2018-03-29

China’s exports are relatively small because more than 90 percent of its exports of steel and aluminum to the United States were covered by special tariffs imposed under other US trade laws of antidumping and countervailing duties.

Nevertheless, on March 23, Beijing announced plans(link is external) to engage in a limited retaliation—in response to Trump’s Section 232 actions—that would cover about $3 billion of US exports. China indicated it may impose 25 percent tariffs on $2 billion of imports on products such as pork and recycled aluminum, as well as 15 percent tariffs on $1 billion of imports of products such as fresh fruit, dried fruit and nuts, wine, ethanol, ginseng, and seamless steel pipes.

The $3 billion in retaliation is roughly in line with the amount of Chinese steel and aluminum exports hit by Trump’s tariffs. While Beijing may be adopting a variant of the “rebalancing” approach that the European Union originally developed in their response to Trump, legal scholars debate(link is external) the questionable(link is external) WTO-legality of this sort of retaliation.

Equally important, even though its retaliation would be limited, Beijing’s action is not an attempt to de-escalate trade tensions.

Retaliation would impose costs on American farmers, companies, and workers that do not benefit at all from Trump’s tariffs on steel and aluminum. Unfortunately, the administration seems unfazed by these potential costs associated with Trump’s own actions. Ross said(link is external) on March 22, “there will be some ultimate retaliation but I don't think it's going to be the end of the earth.”