Mechanical product makers urged to speak out against higher tariffs

Mechanical product makers from China must challenge the US move to impose tariffs on $300 billion worth of imports as it could be detrimental for the sector, a leading industry body said on Wednesday.

The China Chamber of Commerce for Import and Export of Mechanical Products said in a statement that it had urged its members to voice their concerns against the US move and the same would be shared with the US authorities.

The office of the United States Trade Representative proposed to take further actions by imposing 25 percent of additional tariffs on Chinese imports with an annual trade value of approximately $300 billion.

The USTR is seeking comments and will hold a public hearing regarding the proposed modification on June 17. The Chinese chamber will submit the industry's comments on the proposed US plan.

It will be the fifth time that the chamber is submitting the concerns of members to the USTR since August, when the US initiated an investigation of China under Section 301 of the Trade Act of 1974. The investigation seeks to determine whether some Chinese trade policies had impacted US businesses.

In its statement, the chamber said it had urged the US government to stop the 301 investigation and remove the tariffs in its four earlier representations.

Mechanical products account for a significant proportion in the proposed tariff list, according to the chamber. The chamber urged Chinese companies in the industry to continue submitting their comments and views and apply to attend the hearing, while urging relevant US importers, companies and associations to follow suit.

According to the USTR's recent announcement, Chinese products covered in the proposed list are included in 3,805 full and partial tariff subheads. The proposed product list covers essentially all products currently not covered by the US tariff measures since last year. The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials and critical minerals.

China and the US, the world's two largest economies, started retaliatory tariff increases since last July, when the first round of tariffs on $34 billion worth of Chinese goods took effect.

"There had been some significant improvements in US trade for a while in July, following its first tariff move targeting Chinese imports. But by December, trade conditions had deteriorated rapidly in the US," said Gao Lingyun, a research fellow at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences.

"An important reason behind the worsening US trade condition is the substantially higher price of goods that the US imported from markets other than China," Gao said, citing the latest research results.

Mats Harborn, president of the European Union Chamber of Commerce in China, said: "A quarter of our members have exports to the US that were already affected by these ridiculous tariffs. Pushing rates to 25 percent will prove extremely damaging to those companies, and the collateral damage will create ripples around the globe."