Targets of Trump Tariffs Say U.S. Consumers Will Get Pinched
January 23 2018 - 8:29AM
Dow Jones News
By Jon Emont in Hong Kong and Yoko Kubota in Beijing
Asian nations have been bracing for trade sanctions ever since
President Donald Trump took office a year ago.
The wait was over Monday, as Mr. Trump declared tariffs on
imports of Chinese solar panels and South Korean washing machines
-- measures his administration said were needed to protect U.S.
manufacturers from a flood of cheap imports.
South Korea's Trade Ministry called the tariffs unfair and
argued they violated World Trade Organization requirements, while
China's commerce ministry called the action an "abuse of trade
remedies."
The U.S. action will also mean higher prices for American
consumers, said Wang Bohua, secretary-general of China's
photovoltaic industry association, which represents Chinese solar
companies. "They need our products that are cheaper and better," he
said.
What's more, any short-term benefits to the U.S. industry could
be diminished by hurting their global competitiveness, claimed
Trina Solar, a Chinese photovoltaic maker that exports its products
to the U.S. market.
Whatever the merit of those protests, some observers expect them
to grow more numerous in the year ahead as Mr. Trump makes good on
his campaign promise to protect U.S. manufacturers against what he
has called unfair foreign competition.
The year "2018, I believe, will be a very consequential year in
trade relations with China," said Nelson Cunningham, president of
business consulting firm McLarty Associates, who was in Beijing
this week for client meetings.
"It's only the first step," said Mr. Cunningham, a former
adviser to President Bill Clinton on Western Hemisphere Affairs,
said of the sanctions. "I think the administration will be
initiating these cases themselves directly aimed at China."
Xu Sitao, chief economist for Deloitte China, agreed saying
"this incident won't be a one-off."
"The Chinese business community and policy makers should be more
worried, " Mr. Xu added, saying that China's usual response to
trade disputes -- buying more goods from the U.S. -- may not work
this time.
Andrew Tilton, Goldman Sachs chief Asia-Pacific economist, was
less certain, saying it's still a question whether the Trump
administration "may impose significant actions on a much broader
scale."
U.S. businesses, by comparison, are likely to cheer Mr. Trump's
initiative, said Lester Ross, an attorney at WilmerHale in Beijing
and the Chair of the Policy Committee at the American Chamber of
Commerce in China.
"On the whole, the U.S. business community is still very
concerned about China's failure to establish a level playing field
with respect to foreign business, including U.S. businesses," Mr.
Ross said. "If these tariff measures had a broader impact on China,
I think people would be very pleased. But I think there's got to be
a lot of skepticism that these are appropriate ways to address the
larger issues that affect the U.S. business community."
More measures may be coming. Last August, the Office of the U.S.
Trade Representative, at the urging of President Trump, launched an
investigation into whether the Chinese government unfairly
pressures American companies operating in China to share their
intellectual property and offer technology transfers.
That investigation is expected to be completed soon, and
analysts said it could lead to potentially far broader U.S.
sanctions against Chinese companies than those imposed Monday.
But protecting American manufacturing can be more complex than
it appears. Suniva, a solar power company based in Georgia whose
complaint spurred the U.S. government to take action, is majority
owned by Shunfeng International Clean Energy Ltd., a Chinese solar
manufacturer.
Write to Jon Emont at jonathan.emont@wsj.com and Yoko Kubota at
yoko.kubota@wsj.com
(END) Dow Jones Newswires
January 23, 2018 08:14 ET (13:14 GMT)
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