BEIJING (Reuters) – China passed legislation on Friday to strengthen its trade defense capabilities, as the United States and the European Union take aim at the country over excess industrial capacity.
The customs law, approved by China’s top legislature after three deliberations dating back to 2022, has the ability to strike back if China’s biggest trading partner imposes tariffs on the world’s second-largest economy’s exports. It suggests that.
It is the latest addition to the trade defenses of Beijing, which maintains an uneasy truce with the United States after a trade war that began under President Donald Trump.
The law, which takes effect from December 1, outlines a wide range of legal provisions relating to tariffs on China’s imports and exports, from the nature of tax incentives to China’s right to strike back against countries that violate trade agreements. ing.
The proposal was approved on the same day that U.S. Secretary of State Antony Blinken visited China for talks, but it did little to address controversial issues such as U.S. complaints about cheap Chinese exports. There was no progress.
Since President Xi Jinping came to power in 2012, the Chinese government has strengthened its trade defense capabilities by disrupting the movement of goods, data, and personnel between countries that challenge China’s trade practices. They enacted laws that gave authorities a way to retaliate against them. market.
Analysts say rising tensions between China, Washington and Brussels confirm Beijing’s belief that the measures at its disposal need to be strengthened and improved.
Professor Henry Gao of the Singapore Management University said: “This is like a nuclear weapon. The purpose of having a nuclear weapon is not to use it, but to prevent others from using the same thing against you.” That’s what I do.”
“Some may argue that this is not really necessary because when China revised its foreign trade law in 2004, there were measures regarding the application of retaliatory tariffs,” Gao added.
“But I think one of the points that China is trying to make by including this in the new tariff law is that this is our prerogative. If you’re going to impose tariffs on us, we’re also going to You can do the same thing.”
“The principle of reciprocity”
Article 17 of the new law sets out how China can adopt the “reciprocity principle” for markets with which it has entered into preferential trade agreements, allowing Chinese authorities to impose equivalent tariffs on products from countries that break the agreements. Approved to apply.
“This is the first time such a principle has been incorporated into law,” said Lin Qian, senior partner at Beijing DHH Law Firm. However, he said the new law is unlikely to have a major impact on China’s imports and exports, as most provisions of the previous tariff regulations remain in effect.
A new front has opened in the trade war between the West and China, which began with the US government’s import tariffs in 2018, as concerns grow that China’s industrial overcapacity is flooding the EU with cheap products. It’s dark.
Brussels is investigating whether to impose tariffs on Chinese electric cars, and Beijing is conducting its own anti-dumping investigation into EU brandy.
(Reporting by Joe Cash, Ellen Chan, Ryan Wu and Liangping Gao; Editing by Muralikumar Anantharaman, Michael Perry and Timothy Heritage)
