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Enterprises say they will look for goods to replace US products

(People's Daily Online)    17:17, April 03, 2018

China suspended tariff concessions on 128 US products including pork and fruits starting April 2, according to the Ministry of Finance. The tariffed American goods will value to $3 billion based on statistics in 2017.

Before the decision became official, it was supported by the Chinese public, with a lot of people mailing or calling the Ministry of Commerce (MOC) to show their support. Some of them even suggested that the measures should be tougher at the time when the ministry was soliciting public opinions, said a spokesperson of the MOC.

Li Yong, president of China Association of International Trade, said China’s retaliatory measures were taken according to the principle of reciprocity under the trade rules of the World Trade Organization.

The list of items does not cover larger-scale US products, indicating both China’s restraint and determination for retaliation, Li said.

A Carrefour store in eastern Beijing has not yet raised prices of US fruits and nuts as of April 2. The domestic supplier, based in Guangzhou, said it will communicate with the US supplier about strategic price adjustments.

“We haven’t raised our prices on the first day of tariff increases. We are negotiating with our US suppliers, hoping they could make some compromises,” said a marketing manager of the company surnamed Huang.

Huang said he doesn’t expect a trade “war”, which will increase costs and lower profits for his company. But he also said if the war is on, his company will consider replacing products that they use which are from US brands with products from Thailand, Vietnam and even domestic brands.

“We understand our country’s retaliatory measures and as Chinese we don’t want our country’s interests to be hurt by other countries,” he said.

Besides fruits and pork, 33 items on the list were steel products, mainly stainless steel tubes.

The China Iron and Steel Association (CISA) had urged the government to take tough measures to prevent the domestic market from being hurt by US-imported steel when the latter announced the Section-232 investigation.

An employee with the CISA said a public announcement has yet to be made, while an employee with Taiyuan Iron and Steel (Group) Co., Ltd who preferred his name undisclosed said China’s tariff measures on US products will inject confidence into domestic industries.

According to statistics provided by marketing organization LangeSteel.com, in 2017, the US exported 83,600 tons of steel products to China, in which stainless steel tubes weighed 18,800 tons, 22.4 percent of the total volume.

Xu Liying, an analyst with LangeSteel.com, said stainless steel tubes were chosen as the main item for tariff retaliation because they were the main type of US products exported to China, in terms of the volume and the value.

In 2017, US steel products worth 567 million yuan were imported to China, and the value of stainless steel tubes was 115 million yuan, Xu said.

She added that the total volume of stainless steel tubes exported to China from the US is not large. In 2017, China’s import value of stainless steel tubes from the US accounted for only 10 percent of the country’s total stainless steel tube imports.

Therefore, Xu thinks the new tariff measures will not have big impact on domestic enterprises, suggesting them to use products from other countries in order to replace US products after the new measures are implemented. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Bianji, Hongyu)

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