Tariff extension sign of squabble to come

This is an editorial from China Daily.

On Sept 5, 2023, the Office of the United States Trade Representative posted a notice in the Federal Register stating that it was extending previously reinstated exclusions to the Section 301 tariffs till Dec 31.

Days before that extension was due to expire, the USTR's office on Dec 26 announced another extension, this time to May 31, 2024, to allow for comments on a review of the exclusions and alignment with the four-year review.

As part of the trade war it launched against China, the previous administration imposed punitive tariffs on Chinese products under Section 301 of the US Trade Act of 1974 beginning 2018. But 352 Chinese import and 77 COVID-19 related categories were exempted to mitigate the negative impacts of the pandemic on US businesses and consumers.

That the Joe Biden administration remains undecided as to how to deal with the Donald Trump legacy in a presidential election year, with a rematch with his predecessor on the cards, underscores the matter's nature as a political hot potato.

Leaving the Trump tariffs untouched may be perceived as tacit endorsement of his core policies. Going too far in that direction, however, may backfire for that would inflict greater pains on US businesses and consumers. Therefore, when Biden seeks to "put his stamp on Trump's tariffs", as the US news website Axios put it, and look "smarter" and "more strategic", or at least not "soft", as Trump has accused him of being, he has a delicate balance to strike.

The idea so far, appears to be keeping much of the Trump tariffs in place, pairing higher duties on electric vehicles, solar panels and such critical minerals as cobalt and lithium with lower tariffs on some consumer goods.

For the former and present US presidents, getting reelected in November is no doubt their top priority. The tariffs, like any other issues, may just be a political card in their game. Certainly, as in previous presidential campaigns, China is again likely to be front and foremost as the Democratic and Republican presidential candidates compete on the public stage with displays of toughness. It will be particularly so given the unprecedented bipartisan consensus on a tougher approach to China.

The far-reaching damage to the US' image as a preacher of free trade notwithstanding, such a contest will end up harming the US as much as it hurts China. A 2023 study released by major US industry groups found that the tariffs resulted in "many hundreds of millions of dollars a year in costs on apparel, footwear and travel products, with financial burdens falling disproportionately on lower-income consumers".

Yet with the Democrats and Republicans scrabbling and squabbling for an advantage in the run-up to the election, there seems little hope of the Biden administration scrapping the tariffs and fostering a fair and nondiscriminatory trade environment.