U.S. Trade Representative Katherine Tai on raising China tariffs

CNBC Television
14 May 202403:37

TLDRPresident Biden has directed U.S. Trade Representative Katherine Tai to increase tariffs on China in response to ongoing unfair trade practices, including intellectual property theft and forced technology transfer. The new measures involve a 100% tariff on Chinese electric vehicles and other key imports worth approximately $18 billion. The aim is to counteract the Chinese economic system's artificial advantages, which have led to low prices and supply chain vulnerabilities. Ambassador Tai argues that these tariffs are part of a strategic approach to support American jobs and manufacturing, emphasizing the need for a competitive and open market system.

Takeaways

  • 📈 President Biden has directed the U.S. Trade Representative to increase tariffs on China to defend American workers and manufacturers against unfair trade practices.
  • 🚗 The new measure includes a 100% tariff on Chinese electric vehicles, among other products.
  • 💼 The decision follows a review of existing tariffs and is a response to ongoing unfair trade practices such as intellectual property theft and forced tech transfer.
  • 💵 Tariffs are being raised on about $18 billion worth of Chinese imports, including key industries of the future like solar, critical minerals, and batteries.
  • 🌎 The aim is to provide space for American workers and manufacturers to grow and thrive in a global economy that has been dominated by China's artificial advantages.
  • 📉 The Chinese economic system's advantages have led to artificially low prices that open market systems like the U.S. struggle to compete with.
  • 🏭 These practices have allowed China to dominate global production in areas like electric vehicles, steel, aluminum, and solar panels, creating vulnerabilities for the rest of the world.
  • 🔄 Supply chain vulnerabilities, such as those experienced during the COVID-19 pandemic with face mask shortages, are a result of China's market cornering.
  • 🛠️ The U.S. is taking a targeted strategic approach with these tariffs to create American jobs and invest in domestic manufacturing capabilities.
  • 💭 Ambassador Katherine Tai emphasizes that the low prices resulting from China's practices are not due to inflation but are a reflection of unfair anti-competitive trade practices.
  • 📉 The move may lead to inflationary pressures, but the focus is on long-term economic stability and reducing reliance on a single-source global supply chain.

Q & A

  • What is the primary reason President Biden has decided to raise tariffs on China?

    -President Biden is taking this action to defend America's workers and manufacturers against unfair Chinese trade practices, which include intellectual property theft, forced tech transfer, and an overall economic system that has significant effects on the American economy and others.

  • What is the total value of Chinese imports that will be affected by the increased tariffs?

    -The tariffs will be raised on about $18 billion worth of Chinese imports.

  • Which industries are specifically mentioned to be affected by the new tariffs?

    -The industries affected include electric vehicles, solar, critical minerals, and batteries, which are considered industries of the future.

  • How does Ambassador Katherine Tai describe the Chinese economic system's advantages?

    -Ambassador Tai describes the advantages as artificial, created by an economic system that allows for incredibly low prices, which are impossible for open market systems like the United States to compete with.

  • What is the concern regarding inflation due to the increased tariffs?

    -The concern is that the tariffs will add inflationary pressure at a time when the Federal Reserve is closely monitoring the economy and the American public is already feeling the strains from inflation.

  • How does Ambassador Tai respond to the concern about the potential for increased inflation?

    -She points out that the low prices resulting from China's trade practices are artificially low and reflective of unfair anti-competitive practices, which over time have allowed China to dominate global production, creating vulnerabilities and supply chain issues that are actually culprits in inflationary dynamics.

  • What is the strategic goal of the increased tariffs?

    -The goal is to take a targeted strategic approach to create American jobs and invest in American manufacturing capability for long-term economic growth and competitiveness.

  • What are the broader implications of China's trade practices on global supply chains?

    -China's practices have led to a cornering of the global market in production, creating tremendous vulnerabilities for the rest of the world and supply chain vulnerabilities that have been evident in recent years.

  • How does Ambassador Tai relate the issue of supply chain vulnerabilities to past experiences?

    -She uses the example of the face mask shortage in March 2020, where the demand for masks was so high that there was no price because there were not enough masks to meet the demand, illustrating the impact of supply chain vulnerabilities.

  • What is the intended outcome for American workers and manufacturers with the new tariffs?

    -The intention is to provide American workers and manufacturers with the space and room to grow and thrive in a global economy that has been significantly dominated by artificial advantages created by the Chinese economic system.

  • What is the timeframe for the review of existing tariffs that led to this decision?

    -The script does not provide a specific timeframe for the review, but it indicates that the decision to increase tariffs is a response to continuing unfair trade practices.

  • How does the U.S. Trade Representative view the relationship between China's economic system and global economic competition?

    -The U.S. Trade Representative views China's economic system as creating an uneven playing field that gives China an unfair advantage in global economic competition, which the increased tariffs aim to counteract.

Outlines

00:00

📈 Tariff Increase on Chinese Imports

President Biden has directed his representative to increase tariffs on China, including a new 100% tariff on Chinese electric vehicles. This action is a response to ongoing unfair trade practices by China, such as intellectual property theft and forced technology transfer. The aim is to defend American workers and manufacturers and allow them to compete in a global economy that has been dominated by China's artificial advantages. The tariffs will be applied to approximately $18 billion worth of Chinese imports, which are crucial for industries of the future. Despite concerns about potential inflationary pressures, the ambassador argues that China's practices have led to artificially low prices that are unsustainable for open market systems like the US.

Mindmap

Keywords

💡Tariffs

Tariffs are taxes or duties imposed on goods being imported or exported. They are used by governments to control trade and protect domestic industries. In the context of the video, President Biden is increasing tariffs on Chinese imports to counteract what is perceived as unfair trade practices, which include intellectual property theft and forced technology transfer.

💡Unfair Trade Practices

Unfair trade practices refer to actions that violate established norms of international trade, such as dumping (selling goods at below cost to drive out competition), subsidies (financial aid given by a government to a business), and intellectual property theft. The video discusses these practices in the context of China's economic system, which the U.S. believes has had a significant negative impact on the American economy.

💡Intellectual Property Theft

Intellectual property theft is the illegal act of stealing patented, copyrighted, or trademarked materials. It is a form of unfair trade practice that can lead to significant financial losses for the companies whose intellectual property is stolen. In the video, it is mentioned as one of the reasons for the U.S. to raise tariffs on Chinese imports.

💡Forced Tech Transfer

Forced tech transfer is a practice where a foreign company is required to share its technology with a domestic company as a condition of doing business in a country. This is often seen as a form of economic coercion and is considered unfair by many international standards. The video script mentions this as one of the ongoing unfair trade practices that the U.S. is addressing with the new tariffs.

💡Economic System

An economic system is a set of mechanisms by which a country or society organizes and manages its resources, including production, distribution, and consumption. The video discusses the Chinese economic system as one that creates artificial advantages and has significant effects on the global economy, leading to the U.S. taking action to level the playing field.

💡Electric Vehicles

Electric vehicles (EVs) are vehicles that use electric motors and batteries for propulsion, rather than internal combustion engines. They are highlighted in the video as one of the industries of the future that the U.S. is targeting with increased tariffs on Chinese imports, aiming to protect and grow domestic manufacturing capabilities in this sector.

💡Solar Panels

Solar panels are devices that convert sunlight into electricity. They are an essential component of solar energy systems and are part of the industries that the U.S. is focusing on with the new tariffs. The goal is to reduce China's dominance in the production of solar panels and encourage the growth of American manufacturing in this renewable energy sector.

💡Critical Minerals

Critical minerals are elements that are vital to the economy, national security, and the production of various technologies, including those for renewable energy and electronics. The video mentions critical minerals as part of the imports from China that will be subject to increased tariffs, reflecting the U.S.'s intent to secure its supply chains and reduce reliance on foreign sources.

💡Supply Chain Vulnerabilities

Supply chain vulnerabilities refer to weaknesses in the production or distribution network that can lead to disruptions in the availability of goods. The video discusses how the U.S. has experienced supply chain issues, such as the shortage of face masks during the COVID-19 pandemic, which has contributed to inflationary pressures and economic strain.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The video script addresses concerns about the potential for increased tariffs to exacerbate inflationary pressures, but Ambassador Tai argues that the low prices resulting from unfair trade practices are artificially low and not sustainable.

💡Manufacturing Capability

Manufacturing capability refers to the ability of a country or company to produce goods at a certain level of efficiency and quality. The video emphasizes the importance of investing in American manufacturing capability to create jobs and ensure the U.S. can compete in a global economy without relying on imports from countries with unfair trade practices.

Highlights

President Biden has directed his representative to increase tariffs on China to defend American workers and manufacturers against unfair trade practices.

The new measure includes a 100% tariff on Chinese electric vehicles.

The decision follows a review of existing tariffs and aims to respond to continuing unfair trade practices by China.

Unfair practices include intellectual property theft, forced tech transfer, and an overall economic system that significantly affects the American economy.

Tariffs are being raised on approximately $18 billion worth of Chinese imports, including electric vehicles, solar, critical minerals, and batteries.

The goal is to provide American workers and manufacturers with the space to grow and thrive in a global economy dominated by China's artificial advantages.

Ambassador Katherine Tai explains that the Chinese economic system's advantages have led to artificially low prices, which are impossible for open market systems to compete with.

These low prices are reflective of unfair anti-competitive trade practices and have allowed China to corner the global market in production.

The ambassador highlights the vulnerabilities created for the rest of the world due to China's market dominance, leading to supply chain vulnerabilities.

Supply chain vulnerabilities are identified as the culprit in many of the inflationary dynamics experienced recently.

The example of the face mask shortage in March 2020 is used to illustrate the impact of supply chain issues on prices and availability.

The strategic approach with tariffs aims to create American jobs and invest in American manufacturing capabilities for long-term economic strength.

The move is expected to have inflationary pressure, but the ambassador argues that the tariffs are a targeted approach to address unfair trade practices.

The tariffs are intended to level the playing field for American industries such as electric vehicles, steel, aluminum, and solar panels.

Ambassador Tai emphasizes the importance of addressing the root causes of inflation, which she attributes to supply chain issues rather than the tariffs themselves.

The U.S. Trade Representative's announcement is part of a broader strategy to protect American interests and promote fair trade globally.

The decision to increase tariffs is a response to China's significant effects on the American economy and the need to protect domestic industries.

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