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TWN
Info Service on WTO and Trade Issues (Apr25/11) Geneva, 14 Apr (D. Ravi Kanth) — United States President Donald Trump on 13 April said that “there was no Tariff “exception” announced on Friday”, adding that his administration is “taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations” under Section 232, according to a post on his Truth Social website. However, a spokesperson of China’s Ministry of Commerce on 13 April described the move by the United States to exempt a range of electronic products, including computers and smartphones among others from its “reciprocal tariffs” as a “small step”, while urging the Trump administration to rescind the allegedly flawed tariffs altogether, according to a news report in China’s Global Times. Amidst the escalating economic and trade war tensions between the two largest economies, President Trump appears to be finding one reason or the other to justify the exceptions granted to a range of electronic products. “What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China, which will do everything within its power to disrespect the American People,” he wrote, emphasizing that “we also cannot let them continue to abuse us on Trade, like they have for decades, THOSE DAYS ARE OVER!” He said: “The Golden Age of America, which includes the upcoming Tax and Regulation Cuts, a substantial amount of which was just approved by the House and Senate, will mean more and better paying Jobs, making products in our Nation, and treating other Countries, in particular China, the same way they have treated us.” He loudly claimed that “the bottom line is that our Country will be bigger, better, and stronger than ever before. We will, MAKE AMERICA GREAT AGAIN!” Responding to the Trump administration’s move on 12 April to exempt smartphones, laptop computers, memory chips and other electronic items from its reciprocal tariffs, the spokesperson of the Chinese Commerce Ministry said while China is evaluating the US decision, Washington’s move is a “small step”, according to the Global Times report on 13 April. The Trump administration has seemingly decided to exempt the tariffs on twenty categories of electronic products apparently to ease the concerns about the potential inflationary effect on these items. Washington’s move has also been ascribed to pressure from Apple and other semiconductor companies, which source their raw material and final products from China, according to media reports. On late 11 April evening, the US Customs and Border Protection released a list of items that would be exempted from the reciprocal tariffs, including machines used to make semiconductors, as well as computers and computer monitors, tablets, and Apple watches, according to a report in the Wall Street Journal. The Trump administration had announced varying rates of reciprocal tariffs on a number of countries based on their trade surplus with, and exports to, the US. It had also announced a baseline tariff of 10% on all countries. Subsequently, as a result of its move against China, which retaliated against the US reciprocal tariff of 145% on all Chinese goods with a tariff of 125% on all American goods on 11 April, trade between the two countries has almost become prohibitive, said people familiar with the development. The Trump administration paused the retaliatory tariffs on all countries for 90 days while still imposing the 10% baseline tariff on the premise that the final form of “tailor-made” reciprocal tariffs will be finalized during the coming months. However, it has maintained the 145% reciprocal tariff on all Chinese goods. Subsequently, the Trump administration has been seemingly forced to exempt all the main electronic items coming from China because of the concerns of a steep hike in the prices of electronic products. “SMALL STEP” “This represents a small step by the US in correcting its erroneous unilateral approach,” said a statement from China’s Ministry of Commerce, in reference to the announcement by the Trump administration on exempting a range of electronic products from the reciprocal tariffs. Beijing on 13 April urged the US to take a significant step in correcting its mistakes and completely cancel the wrong practice of “reciprocal tariffs”, according to the news report in the Global Times. A spokesperson from the Chinese Commerce Ministry apparently said that this is the second adjustment to the relevant policies since the US suspended the imposition of high “reciprocal tariffs” on some trading partners on 10 April. It should be said that this is a small step for the US to correct its unilateral “reciprocal tariff” erroneous practice, the Global Times reported. The implementation of so-called “reciprocal tariffs” through an administrative order not only contravenes fundamental economic and market principles but also disregards the complementary cooperation and supply- demand relationships between nations, the Global Times suggested. Meanwhile, in another news report in the Global Times on 12 April, it is reported that the Chinese Minister of Commerce Wang Wentao spoke to the World Trade Organization’s Director-General, Ms Ngozi Okonjo-Iweala, on the US imposition of reciprocal tariffs. The Chinese commerce minister and the WTO DG exchanged views on addressing the US imposition of so- called “reciprocal tariffs,” while upholding the multilateral trading system and giving full play to the role of the WTO, the Ministry of Commerce (MOFCOM) said on 11 April, according to the Global Times news report. The Chinese commerce minister said that the US has repeatedly imposed tariff measures, which have created immense uncertainty and instability to the globe, triggering chaos both within the international community and domestically in the US. “The so-called US “reciprocal tariffs” represent typical unilateral bullying practice,” the Chinese commerce minister is understood to have said. The US tariff measures would cause significant harm to developing countries, particularly the least developed, and could even spark a humanitarian crisis, Minister Wang warned, according to the Global Times report. The US “reciprocal tariffs” seriously violate the WTO’s most fundamental and core rules, including most- favored-nation treatment, non-discrimination, and bound tariffs, he conveyed to the DG, adding that the US moves also undermined the international economic and trade order and shook the foundation of the multilateral trading system. In response, Ms Okonjo-Iweala said that the escalating trade tensions have posed significant challenges to the prospects of global trade and economic growth, according to the Global Times. WTO members should jointly uphold an open, rule-based multilateral trading system and address divergences through dialogue and cooperation under the WTO framework, she added. Any outcomes from agreements with the US should adhere to the WTO’s most-favoured-nation principle, Ms Okonjo-Iweala said, according to the Global Times report. Surprisingly, the WTO did not post on its website any news item on the DG’s discussions with the Chinese commerce minister. +
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