The architect of Washington’s trade war with China said the US needs to unilaterally raise tariffs on all Chinese imports in order to limit economic ties with America’s biggest adversary.
(Bloomberg) — The architect of Washington’s trade war with China said the US needs to unilaterally raise tariffs on all Chinese imports in order to limit economic ties with America’s biggest adversary.
“I propose doing this clearly and phasing it in over time to minimize disruptions and allow for businesses to change their current practices,” former US Trade Representative Robert Lighthizer wrote in his new book, titled “No Trade Is Free.”
Donald Trump’s top trade adviser said tariffs are the best way to balance the economic relationship with China, which he described as the “largest geopolitical threat the United States has faced, perhaps since the American revolution.”
In the book, Lighthizer outlined an eight-point plan to address the risks. Among his advice to US lawmakers: repeal US permanent normal trade relations with China, further strengthen US export controls for strategic goods, and set other limits on Chinese companies to prevent them from accessing the US market.
Overall, Lighthizer said he’s been “pleasantly surprised” with President Joe Biden’s China policy and commended the passage of the US CHIPS and Science Act, which increases subsidies for domestic semiconductor manufacturing.
Biden “essentially adopted the Trump trade policy,” Lighthizer said. Still, he criticized current USTR Katherine Tai for pausing tariffs against the European Union following a tariff war that impacted $18 billion worth of transatlantic commerce.
Lighthizer defended the Trump administration’s costly trade wars, which he said were “without any meaningful inflationary effect.”
He acknowledged that the Chinese did not meet their purchasing agreements under his Phase I trade agreement but defended the accord for making the US “less dependent on its most dangerous global adversary.”
Tariff Mistakes
Lighthizer conceded that some mistakes were made during his term including the sequencing of the administration’s tariff war with China after it slapped national security tariffs on steel and aluminum exported from both America’s friends and foes.
Lighthizer wrote that he would have preferred if the Chinese tariffs had come first and he “would have tried harder to get Europe to agree to voluntary quotas before imposing” any steel and aluminum tariffs.
That move enraged Europeans and America’s NATO allies who bristled at the notion that their metal exports posed a security threat to the US. Nevertheless, Lighthizer said he “was not particularly moved” by Europe’s “faux outrage” and called the bloc’s decision to retaliate against US exports “a master class in hypocrisy.”
Lighthizer said the US did not conclude a post-Brexit trade deal with Britain because existing UK tariffs were “mostly small and the businesses already had established patterns.”
He also offered a radical plan for reforming the World Trade Organization that would “reset the global tariff system” with a “new baseline” for all tariffs, end special and differential treatment for China, introduce sunset clauses into WTO agreements and replace the dispute settlement system with a commercial arbitration mechanism.
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