US buck passing strategy offers no way forward

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

Washington has been acting outrageously by threatening tariffs and making groundless accusations against China, while at the same time trying to carry on with the trade consultations as if everything was normal.

Director of the White House National Trade Council Peter Navarro. [File photo: IC]

White House trade adviser Peter Navarro said on Sunday that the United States would not eliminate the extra tariffs it imposed on Chinese goods until China stopped what he called the “seven deadly sins,” among which he listed stealing American intellectual property, forcing technology transfer, heavily subsidizing state-owned enterprises, and shipping fentanyl to the United States. Such charges are nothing more than clichés aimed at smearing China.

Take the issue of intellectual property protection as an example. The achievements China has made in this regard have won praise from the international community, and are a vital part of China’s development as an innovation-driven economy. In the first half of this year, the number of foreign applications for invention patents in China reached 78,000, up 8.6 percent year-on-year, with the number of foreign trademark applications reaching 127,000, up 15.4 percent. These combined reflect the strong confidence that global innovation entities have in China’s intellectual property protection. Such efforts have also won praise from Francis Gurry, the director general of the World Intellectual Property Organization, who recently said China had become “an international leader” in IP protection. In the organization’s latest 2019 edition of the Global Innovation Index, China rose to 14th place, up from last year’s ranking of 17th.

As for the issue of fentanyl regulation, China has put 25 types of fentanyl-related substances under generic control, outnumbering the 21 variants regulated by the United Nations. China’s move in May to schedule all fentanyl-related substances as controlled narcotics, which has been welcomed by the international community including the U.S. Drug Enforcement Administration, makes the country a harsher regulator than the United States in controlling the lethal substance. The major reason for the widespread use of fentanyl in the United States is the misuse and abuse of prescription drugs that has long been prevalent in the country in addition to Washington’s failure in narcotics control, rather than the influence of any other countries such as China.

Navarro’s ‘Seven Sins’ are merely part of a smearing game in the face of fierce criticism and opposition from within the United States after President Donald Trump announced a 10 percent additional tariff on 300 billion US dollars of goods imported from China, which is widely believed will cause further damage to the U.S. economy.

Trade bullying will backfire on Washington and U.S. consumers and companies will have to pay the price. According to a recent study by Goldman Sachs, the tariffs on the 200 billion dollars’ worth of Chinese imports would boost U.S. core personal consumption expenditures (PCE) inflation by 20 basis points, and if Washington imposes tariffs on the roughly 300 billion U.S. dollars’ worth of remaining Chinese goods, “the effect would increase to 50 points.”

Navarro has repeatedly insisted that U.S. consumers would not have to pay more when tackled on the issue by U.S. media over the weekend. However, CNN’s Erin Burnett quoted a statement from Michigan-based furniture manufacture La-Z-Boy, stating that the tariffs put a surcharge of 42 U.S. dollars on a sofa originally priced at 120 U.S. dollars. Also, Fox News’ Chris Wallace pointed out that a chart from the U.S. Department of Labor and Department of Commerce showed the levies correlated with higher prices for U.S. consumers.

The White House trade adviser also noted that the U.S. side was “planning on having the Chinese come in September.” But he has to bear in mind that the United States’ unilateral tariff increase on China-made goods triggered the trade tensions. It’s only reasonable that Washington lifts all extra tariffs so that a deal can be reached between the two sides.