Chamber Official Says Currency Pact Could Delay Oct. 15 Tariff Hike
There's the possibility of an agreement on currency manipulation this week, according to U.S. Chamber of Commerce Head of International Affairs Myron Brilliant. Brilliant, who spoke with both China's chief negotiator and members of the Trump administration ahead of the Oct. 10 negotiating session, told reporters on a conference call that if the two sides come up with a currency agreement, that might lead to a reprieve for importers who are expecting 25 percent tariffs to go to 30 percent on Oct. 15.
Meanwhile, during an Oct. 10 conference call with industry, a CBP official noted the lack of an official notice for that increase and said that the effective date for the tariffs could still change. The increase is slated for Section 301 tariff Lists 1, 2 and 3, which account for about $250 billion in annual imports combined. USTR didn't immediately comment.
Brilliant said the Chamber believes "we can’t afford a further acceleration of the trade war," because it could increase the possibility that the U.S. economy could go into a recession. He said he's confident the administration is also aware of that risk. But while the Chamber is rooting for some minor developments this week -- on currency, access for U.S. financial services, soybean purchases, and Huawei export licenses -- the business group still is looking for a comprehensive, enforceable agreement that tackles long-time irritants like forced technology transfer and intellectual property theft.
"We’re going to get some progress we would welcome in the IP area," Brilliant predicted, maybe announced this week. He said those advances would likely be around copyright, trademarks and broadcasting. "They see that in their self-interest as they develop more and more innovative enterprises," he said of the Chinese. But he said China is not talking about free data flows or protection for source code.
Brilliant said he hopes that the concessions from China are substantial enough the administration not only refrains from increasing tariffs from 25 percent to 30 percent -- "which I think they might do" -- but also removes the threat of putting tariffs on the last tranche of goods on Dec. 1 or even rolls back the 15 percent tariffs on List 4, that began Sept. 1. "But that’s going to depend on what offers" China makes, he said. "That’s the aspiration we have. Whether they get there or not, we’ll see."
Brilliant called on the Chinese to return to the 150-page draft that was in place before China retreated in May. "Let’s get back to that time when the two sides were close," he said. "That’s what’s in the interest of both countries."
Brilliant acknowledged that China backtracked because they didn't want to codify some commitments in law, and they wanted more certainty on tariff removal. In response to a question from International Trade Today, he said some of the items the U.S. wanted law changes for could be accomplished with directives. But he said, "At the end of the day we want something enforceable. That does require some of the issues that were being raised by the administration to be addressed through legislative changes [in China]."
Brilliant said that when he talked to China's chief negotiator, he told him that waiting out President Donald Trump is not a good strategy. "We need to focus on what we can get done in the current administration. The environment’s not going to get any better in 12 months, 18 months."