U.S. Trade Representative Robert Lighthizer said Thursday that the White House did not expect to resolve its ongoing trade disputes with China in the foreseeable future, indicating that the tariffs against that country and its retaliatory ones against the U.S. could last for a while.
“China is going to be a longer-term problem. That isn’t to say we are going to be in a trade war with China in my judgment,” Lighthizer told the Senate Appropriations Committee on Thursday. Lighthizer was responding to questions from Sen. Joe Manchin, D-W.Va.
Lighthizer said the issue was that China’s industrial policy, in the case of steel, resulted in them developing major capacity for political, not economic, reasons. “They have 300 million tons of excess capacity. To give you a relative idea, we make in the United States something just south of a hundred million tons of steel. In China, they make 1.1 billion tons … They created it largely to get rid of imports. As these things do, it got out of control and then they got so big they swamped the entire world.”
The same scenario happens with aluminum, solar panels, and other products, he added. In the administration’s view, it is unwise to be the recipient of China’s excess because that undermines domestic producers. Resolving this problem is far more complicated than renegotiating the North American Free Trade Agreement, he added, even as difficult as that has been.
The U.S. has imposed tariffs of 25 percent on steel imports and 10 percent on aluminum ones, policies primarily directed at China. The White House has placed 25 percent tariffs on $34 billion of goods specifically from China, released a list of $200 billion in Chinese goods it plans to hit with 10 percent tariffs, and threatened to enact additional levies on top of those. In retaliation, China has established 5 to 25 percent additional duties on $3 billion in U.S. imports and threatened further actions.
