US Chamber Executive Says China Negotiations Moving Along, Fate of Tariffs Still a Question
Momentum is moving China and the U.S. toward a trade deal, Myron Brilliant, head of international affairs for the U.S. Chamber of Commerce, said while speaking with reporters April 2. "We're getting into the end game phase" with China, he said. Brilliant said the negotiations with the Chinese delegation that will begin April 3 will be critical to reaching a resolution at the end of April, as both sides desire. But Brilliant emphasized that the business community is more interested in a comprehensive, durable deal that resolves long-standing complaints on discrimination against foreign companies operating in China and subsidies for Chinese firms than in reaching a quick deal.
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"Ninety percent of the deal is done, but the last 10 percent is the trickiest to get done," he said. Brilliant, who recently returned from a 10-day trip to China where he spoke to government officials, said that the Chinese and the business community would prefer that the 25 percent tariffs on $50 billion in imports and the 10 percent tariffs on $200 billion in imports be lifted at the time of a deal. But, Brilliant said, it's clear the president wants to retain at least some of the tariffs after a deal is reached, so that it keeps pressure on China to follow through with its agreements.
Arriving at an agreement on tariffs "is why we don't have a deal at this point," Brilliant said, though he said there are other details that are not nailed down as well, on joint ventures, market access and purchases.
Brilliant predicted that a deal will be reached, and cited the announcement April 1 that China would be classifying fentanyl and its chemical cousins as controlled substances as something that "indicates a willingness to get the deal."
In response to a question from International Trade Today, Brilliant said there are several paths the administration officials could take to partially remove tariffs. They could select $50 billion or $100 billion worth of imports to remove from the lists. They could reduce the rate on the largest list from 10 percent to 5 percent. And, he said, further removals or reductions could be tied to specific milestones of Chinese policy changes.
But Brilliant said the proposal that U.S. Trade Representative Robert Lighthizer proposed on enforcement -- that the U.S. would have a right to impose tariffs in the future and the Chinese would not retaliate -- is unlikely to be accepted by the Chinese unless all the tariffs come off at the time of signing.
The Chamber would prefer that the tariffs come off at signing, and Brilliant said, "if there's a snapback provision or something else" that would allow for future tariffs if follow-through is lacking, "that's understandable," he said, adding that the longer the Section 301 tariffs are in place, the higher the burden is on American consumers and businesses.