Beijing has responded to two U.S. trade investigations mounted recently by launching its own probes into U.S. trade practices, the Chinese Ministry of Commerce said Friday.
The Trump administration launched investigations into countries’ industrial overcapacity and efforts to address forced labor in supply chains under a statute known as Section 301. China features in both investigations – which could be used to justify new tariffs.
“China expresses its strong dissatisfaction and firm opposition to this,” a Ministry of Commerce spokesperson told reporters on Friday, according to an unofficial translation of a transcript of their remarks.
Accordingly, China will investigate the U.S. for its role in disrupting global supply chains and its adoption of measures that “hinder trade in green products,” the spokesperson said.
Depending on the results of the investigation, Beijing will “take corresponding measures,” the spokesperson added, “to resolutely safeguard its legitimate rights and interests.”
Most Chinese exports arriving in the U.S. currently face a 10% global tariff, which the administration has indicated could soon rise to 15%.
The move is effectively a tariff rate cut. Before the Supreme Court struck down President Donald Trump’s emergency tariffs, China faced a 20% tariff rate on most products – a 10% reciprocal tariff rate and a 10% tariff imposed over China’s role in the global fentanyl trade.
The latest probe suggests China could raise its tariffs on the U.S. even if the Trump administration only brings its tariff rates back to the pre-Supreme Court decision levels, former trade negotiator Wendy Cutler said in a social media post Friday.
“This is more than a [tit-for-]tat move,” she wrote.
She argued that the move suggested “growing confidence” in Beijing. “China is in effect telling the U.S. that if you return to your IEEPA level tariffs (which we accepted in our October truce) we will impose more tariffs to match that increase,” she added, referring to the tariffs imposed under the International Emergency Economic Powers Act.
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Trump is slated to meet President Xi Jinping in mid-May for further discussions. The latest probes, Cutler argued, could give Chinese negotiators another negotiating piece to press for additional U.S. concessions.
“This development will not be welcomed in Washington,” she said, arguing officials will be “loathe to go down the escalation route and respond to any new Chinese tariffs.”
Ryan Majerus, a trade lawyer at King and Spalding and former Commerce Department official, agreed that the move was likely to strengthen Beijing's negotiating hand ahead of the upcoming summit.
"The open question is how the U.S. will respond, given the other challenges in the bilateral relationship – in particular, critical minerals," Majerus said in an email.
China has previously used curbs on critical mineral exports to put pressure on U.S. industries.
U.S. Trade Representative Jamieson Greer has gone to great pains to publicly stress that the administration is not planning on hiking tariffs on China above the 20% rate in place before the Supreme Court decision. He said in an interview on Fox Business last month that officials expect to “really stick to the deal that we had before,” stressing, “We don’t intend to escalate beyond that.”
Cutler argued, however, that the unfolding situation is a result of the administration’s rush to use untested authorities in an effort to swiftly impose tariffs.
“This all could have been avoided had the Administration from the get go turned to traditional and well-tested trade statutes to implement their tariff policy,” she said. “Instead they gambled with IEEPA and lost.”
This story has been updated to correct the name of the law firm King and Spalding.
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