US will not withdraw taxes imposed on Chinese goods: US Trade Represe

Washington: US Trade Representative claimed that the taxes imposed on the Chinese goods during former US President Donald Trump’s tenure would not be withdrawn. US Trade Representative Katherine Tai said that withdrawal of China’s taxes could negatively affect the US economy. While indications of a softer stand regarding China are being received from the Biden administration, the stand adopted in this matter attracts attention.

Former US President Donal Trump had declared an open trade war against China, accusing that China was fleecing the United States in bilateral trade. The Trump administration-imposed taxes on Chinese goods imported into the United States, worth nearly $550 billion, during 2018 and 2019. In retaliation, China also started imposing taxes on US goods. The Global economy also was severely hit due to this trade war between the two leading economies of the world.

Still, Trump had refused to withdraw from the trade war. After feeling the heat of the US trade war, China started talks with the United States regarding a trade agreement. Last year, the Phase 1 trade agreement was signed in January. As per this agreement, China was to import goods worth $200 billion from important sectors like agriculture, manufacturing and energy, in the next two years.

The taxes imposed by China on US goods had been reduced or withdrawn. In return, the United States cancelled proposed taxes on Chinese goods worth $160 billion. But the 25% tax imposed on Chinese goods worth $250 billion was retained. The US-China trade agreement is in a preliminary phase and the United States had warned that if China violated the agreement, the taxes would be imposed again.

During his election campaign, US President Joe Biden had assured that there will be no changes in the taxes imposed by the Trump administration on Chinese goods in the near future. Janet Yellen, US Secretary of the Treasury, had clarified that the baton of taxes raised against China would continue during a hearing last month. The statements of US Trade Representative Katherine Tai seems to endorse the views.

US Trade Representative Katherine Tai warned that China’s taxes would not be withdrawn, saying that many from the United States are demanding withdrawal of taxes against China. But the withdrawal of these taxes could severely hit the US economy. It will not be appropriate to withdraw these taxes unless factors like US companies, traders, workers are ready for the changes after the withdrawal. Please remember that negotiating parties will never distance themselves from profits.