According to a notice published on the website of the Office of the US Trade Representative (USTR) on May 3, the US may lift tariffs on some Chinese goods on the four-year anniversary of the tariffs being instated. The notice puts in motion a standard legal requirement for the USTR to review tariff actions four years after they were instated. The four-year anniversary of two tariff actions, which took effect on July 6, 2018 and August 23, 2018 under Trump, will occur this summer. The notice called on representatives of domestic industries that benefit from trade tariffs on Chinese goods to submit requests for the continuation of the tariffs during two dockets open from May 7 to July 5 and July 6 to August 22, respectively. If a request is submitted to the USTR, it will commence a review of the tariff to assess whether it will be extended. If no request is submitted for a given tariff, then it will presumably be lifted, but not official statement has been made on the timeline or certainty of this happening.
On the same day, Reuters reported that the Biden administration is considering granting a request from a South Korean solar panel manufacturer to overturn an exemption that allows certain solar panel technology to be imported into the US from China and other countries without paying tariffs. In addition to increasing the tariffs, the Biden administration has also vowed to take action against countries and importers that seek to circumvent the rules and avoid tariffs. It also said it would work with Mexico to prevent China and other countries from evading tariffs by importing products through Mexico. The Biden administration has called on the US Trade Representative (USTR) to investigate what it calls “China’s unfair shipbuilding practices” and consider tripling tariffs on Chinese steel and aluminum imports from the current average rate of 7.5 percent. A core part of the IRA, which was signed into law in 2022, is to boost investment and development of green industries in the US by providing a range of subsidies, incentives, and tax credits to green industries, including domestic EV manufacturing. In May 2024, the US raised tariffs on Chinese EV imports from 25 percent to 100 percent, citing the domestic development of the industry as a motivator for the hike.
Wang also held two rounds of meetings with Secretary of State Antony Blinken, in which “Both sides agreed to work together to achieve a meeting between the two heads of state in San Francisco”, per the Foreign Ministry. The two sides committed to engaging in various forms of communication, including “China-US maritime affairs consultations, China-US military control and non-proliferation consultations, China-US foreign policy consultations, and China-US coordination on disability affairs”. They also discussed signing a memorandum of understanding on cooperation on disability affairs in the near future. The US Department of the Treasury has announced a visit by Chinese Vice Premier He Lifeng for two days of bilateral meetings on November 9 and 10 in San Francisco, California. The meetings will take place just a few days ahead of the expected meeting between President Xi Jinping and President Joe Biden at the APEC Summit, which will also be held in San Francisco. The meetings are “designed to further stabilize the bilateral economic relationship and make progress on key economic issues”.
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Podesta reportedly also stated that the US was willing to further “strengthen communication and coordination with China and engage in constructive cooperation”. The US Senior Advisor to the President for International Climate Policy John Podesta met with China’s Special Envoy for Climate Change Liu Zhenmin in Beijing for the second US-China Working Group on Enhancing Climate Action in the 2020s. The DHS Restrictions on Confucius Institutes and Chinese Entities of Concern Act, meanwhile, restricts funding to universities that have a relationship with a Confucius Institute. Effective September 27, tariff rates will increase to 100% on Chinese electric vehicles, 50% on solar cells, and 25% on EV battery parts, critical minerals, iron and steel, aluminum, masks, and shore container cranes. The increases for 2025 and 2026 will apply to relevant products on or after January 1 of the respective year.
On the same day, Chinese Ambassador to the US Qin Gang, speaking at the Aspen Security Forum in Colorado, criticized the US’ increasingly close ties with Taiwan, stating that “The United States is … blurring out the “One China’ policy”. Officials from the Biden administration have repeatedly said that the US’ stance on the One China policy has not changed. Both sides called for increasing cooperation and working together on major issues “such as climate change, global macroeconomic stability including debt relief, health security, and global food security”, according to the official meeting readout published on the White House website. On the sidelines of the Munich Security Conference on Saturday, Chinese Foreign Ministry spokesperson and former foreign minister Wang Yi held an informal meeting with US Secretary of State Antony Blinken to discuss a variety of security issues, including the so-called “balloon incident” and the Russia-Ukraine war.
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- Xi Jinping has held a surprise meeting with Governor of California Gavin Newsom, during the latter’s trip to China, the first by a US governor in four years.
- The announcement also stresses that all UAVs not explicitly listed but known or suspected to be used for mass destruction, terrorism, or military purposes may also not be exported.
- President Xi and President Biden spoke on a conference call on Friday evening (March 18), the first direct communication between the two leaders since their virtual summit in November 2021 and the first talk since the outbreak of the Russia-Ukraine war.
In remarks given ahead of the four-hour meeting, held on the sidelines of the APEC Summit, both leaders emphasized the importance of the bilateral relationship, with Xi calling it “the most important bilateral relationship in the world”. The Chinese Defense Ministry, referencing the recent meeting between Presidents Joe Biden and Xi Jinping in San Francisco in November, emphasized the need for mutual respect and equality in military exchanges to stabilize and improve bilateral relations. General Liu underscored that Taiwan is an internal matter for China, rejecting any external interference. He also urged the US to respect China’s territorial sovereignty in the South China Sea, emphasizing the importance of careful actions to maintain regional peace, stability, and the overall China-US relationship. On October 28, the US Treasury Department issued final rules on investment restrictions against China, targeting sectors such as semiconductors, artificial intelligence, and quantum computing.
Trump’s Chaotic Agenda Has a Critical Through Line
He also reiterated that the US will continue to prevent “advanced US technologies from being used to undermine our national security and economy without unduly limiting trade or investment”, in reference to the US’ export restrictions on various types of advanced technologies to China. On Sunday, Blinken held “candid, substantive, and constructive talks” with Chinese Foreign Minister Qin Gang. According to the readout released by the Chinese foreign ministry, Qin Gang noted that the China-US relationship was at “the lowest point since its establishment” and that “this does not serve the fundamental interests of the two peoples or meet the shared expectations of the international community”. The Ministry of Commerce stated that the measures extend extraterritorial jurisdiction, interfering in trade between China and third countries, which is a typical act of economic coercion and non-market practice. The US has been inconsistent in its actions, continuously broadening the concept of national security, abusing export control measures, and engaging in unilateral bullying. The semiconductor industry is highly globalized, and the US’s misuse of control measures severely hinders normal economic and trade exchanges between countries, disrupts market rules and the international economic and trade order, and threatens the stability of the global industrial and supply chains.
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- The officials stressed they were not advocating for decoupling but wanted businesses and academics to understand that the Chinese government has a sweeping national plan to dominate in these fields.
- Amid fallout from a Chinese airship dubbed a “spy balloon” observed flying in US airspace (Montana), several media outlets have reported that the Biden administration has postponed Secretary of State Antony Blinken’s diplomatic visit to China, due to take place on February 5 and 6, citing a State Department official.
- Blinken’s upcoming visit has raised hopes of a “thaw” in US-China relations, but US officials have emphasized that they do not expect a major breakthrough.
- The law made it illegal for mobile app stores, such as Apple’s App Store and Google Play, to host TikTok on their platforms.
Global businesses understand that investing in China and entering partnerships with Chinese suppliers presents some risk as future U.S. restrictions may disrupt their business plans. For instance, even if the current U.S. export controls are limited in scope, all U.S. semiconductor firms must weigh the risk that stock crash history those export controls will expand in the future and encompass their products. Companies may determine that it is prudent to diversify and invest in and develop relationships with other countries, even if that comes at a higher up-front cost.
In a routine press briefing on Wednesday 11 May, Foreign Minister Zhao Lijian urged the US to remove the tariffs, stating that “I think it’s time for the US administration to reconsider and to cancel it as early as possible”. Under the rule, the Chinese companies were added to the list for allegedly “attempting to evade export controls and acquiring or attempting to acquire U.S.-origin items in support of Russia’s military and/or defense industrial base”. Meanwhile, a readout of a media Q&A on Yellen’s visit published by China’s Ministry of Finance (MOF) echoed some of the sentiments of Yellen’s speech, stating that “a healthy and stable Sino-US relationship is not only beneficial to the two countries but also conducive to world peace and development”. The climate talks also come after a series of extreme weather events in both countries in 2023, adding to the urgency for bilateral cooperation and consensus on climate change.
The release states that the purpose of the export controls is to “protect U.S. national security and foreign policy interests” and will “restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications”. China has stated strong opposition to the further tightening of chip export controls, calling for their removal. While value chains connecting the two nations remain highly intertwined, the tariffs imposed by the Trump administration have had a noticeable negative impact on U.S.-China trade. Between 2017 and 2022, while China’s total exports to the U.S. increased, the share of U.S. imports from China fell from 22 percent to 16 percent.
This is likely in reference to the US, which has imposed export controls on various Chinese goods due to their purported dual military use. Per a meeting readout from the State Council, Wang championed bilateral engagement on climate change, stating that it is “not only an integral part of bilateral relations, but also an important measure to implement the consensus reached by the two heads of state” during their meeting in San Francisco in November 2023. Relations between the world’s two largest economic powers, the United States and China, are at lows not seen since the aftermath of 1989’s Tiananmen Square massacre. China’s human rights abuses, especially in Hong Kong and Xinjiang, border aggressiveness, and “wolf warrior” diplomacy, combined with the Trump administration’s legacy and the ongoing pandemic, have left bilateral relations at a nadir. U.S. imports from China across all sectors decreased 24 percent in the period of January-May 2023 compared to the same period in 2022. According to figures published by China’s State Administration of Foreign Exchange, foreign direct investment in China from Q decreased 76 percent from the previous quarter and 87 percent from Q2 2022, hitting the lowest quarterly level since 1998.
President Xi and President Biden spoke on a conference call on Friday evening (March 18), the first direct communication between the two leaders since their virtual summit in November 2021 and the first talk since the outbreak of the Russia-Ukraine war. The US Securities and Exchange Commission (SEC) has added the social media company Sina Weibo to a list of companies for possible delisting under the Holding Foreign Companies Accountable Act (HFCAA). The addition follows the publication on March 10 of a provisional list of five Chinese companies for possible delisting from US stock exchanges (see Day 414 – 420 update). Meanwhile, Chair of the PCAOB Erica Y. Williams stated that “On paper, the agreement signed today grants the PCAOB complete access to the audit work papers, audit personnel, and other information we need to inspect and investigate any firm we choose”. Throughout the summit and the 29th APEC Economic Leaders’ Meeting in Bangkok, Thailand, which takes place from November 17 to 19, President Xi Jinping will also be holding meetings with French President Emmanuel Macron, Senegalese President Macky Sall, and Argentine President Alberto Fernández, among others.
Many of the newly targeted companies are subsidiaries and affiliates of major state-owned companies and businesses named on the earlier blacklist. During the three-day summit of the Group of Seven (G7), the leaders of the wealthy democracies criticized Beijing over human rights in its Xinjiang region, called for Hong Kong to keep a high degree of autonomy, and demanded a full investigation of the origins of the coronavirus in China. Following the G7 Summit, the North Atlantic Treaty Organization (NATO) leaders declared that China presents a global security risk, at their annual summit in Brussels. The traditionally Russia-focused military alliance for the first time shifted its focus to China, asserting the need to respond to Beijing’s growing power. China and the US have announced easing of restrictions on access for journalists from each other’s countries, according to Chinese state media and the US State Department. The 34 entities include China’s Academy of Military Medical Sciences and 11 of its research institutes, as well as 22 corporate entities including several semiconductor companies.
The secretary also raised concerns over China’s support for Russia’s “defense industrial base”, cross-strait relations, and stability in the South China Sea, as well as issues in the Middle East and the Korean Peninsula. This move by MOFCOM is widely seen as a retaliatory measure to export controls and anti-dumping measures imposed by the US, the EU, and other countries. Meanwhile, the EU has launched several anti-subsidy probes into Chinese imports, including electric vehicles, wind turbines, solar panels, and some steel products. In April, Japan stated it was considering expanding export restrictions on key semiconductor technology. While China has had export controls in place since 1994, the government modernized its export control policies in 2020, creating a unified framework for managing sales of dual-use technology, military goods, and “national security” interest technology.