Building Trade Walls / Construyendo las murallas del comercio. New York Times

Building Trade Walls / Construyendo las murallas del comercio. New York Times

KEITH BRADSHER & KARL RUSSELL

07/03/2017

https://www.nytimes.com/interactive/2017/business/trade-china-protectionism.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=b-lede-package-region&region=top-news&WT.nav=top-news&_r=0

El artículo revisa las condiciones arancelarias entre EEUU y China y sus perspectivas de cambio durante la nueva "Era Trump".

Inglés

President Trump’s advisers and allies are pushing an ambitious idea: Remake American trade.


They are considering sweeping aside decades of policy and rethinking how the United States looks at trade with every country. Essentially, after years of criticizing China and much of Europe for the way they handle imports and exports, these officials want to copy them.


This approach could result in higher barriers to imports that would end America’s decades-long status as the world’s most open large economy. This could lead to slightly higher prices in the United States for everything from Chilean grapes to iPhones to gasoline. But it could also provide a boost to companies and workers who make things in the United States and sell them abroad.


Will it happen? Mr. Trump has hinted at the issue, saying to Congress last week that “other countries make us pay very high tariffs and taxes,” but “we charge them almost nothing.” The discussion, if translated into action, could affect national economies and regular households alike — and create big problems for countries like China that depend heavily on exports to the United States.


Putting Up Barriers


First, it helps to understand how the United States and other countries currently treat trade.


The most visible layer is tariffs, or taxes on imports. The World Trade Organization, the global trade adjudicator, has allowed developing countries to impose far higher tariffs than industrialized countries, while they build up industries at home. China has been counted as a developing country.


But most countries have additional barriers. For example, China and most other countries, but not the United States, also charge a steep value-added tax, which is a kind of national sales tax on imports and home-produced goods alike. Exports are exempt from value-added taxes, giving companies an incentive to sell overseas.


Once value-added taxes and sales taxes are included in an international comparison, America’s trade barriers are much lower than those of almost every other country.


Rethinking Trade


Mr. Trump’s advisers and some lawmakers don’t like this arrangement.


For starters, they question why China’s average tariffs are about three times as high as those in the United States — and its tariffs on manufactured goods, which involve a lot of jobs to produce them, are far higher still. Those levels are allowed because when China joined the World Trade Organization in 2001, it was clearly a developing country. Lower American trade barriers have helped China increase exports to the United States, while importing fairly little.


Today, China’s designation as a developing country is more debatable. China is the world’s second-largest economy and the biggest producer of steel and cars.


Still, China trails most developed nations by some measures, and Chinese officials argue that it is still developing and does not yet qualify as industrialized.


China’s economy is still roughly two-thirds the size of the American economy, even though China has four times as many people. Average incomes in China are still one-fifth to one-quarter of levels in the United States, and much of China’s interior is still underdeveloped.


“We still hold the developing countries’ standpoint,” said Li Gang, the deputy dean of the Commerce Ministry’s research unit, the Chinese Academy of International Trade and Economic Cooperation.


When China joined the W.T.O. in 2001, the expectation was that its tariffs would later be adjusted lower during global trade talks, known as the Doha Round. But those talks fell apart for a variety of reasons.


How Tariffs Hit Industries


While China’s average tariffs are higher, they vary widely by industry, and that has contributed to big industrial shifts.


Consider cars. China’s tariff on imported cars is 25 percent of the wholesale price, which is one reason General Motors, Ford and Volkswagen set up huge factories in China. By contrast, tariffs in the United States are just 2.5 percent for imported cars, minivans and sport utility vehicles. So automakers make in China almost all the cars that they sell there, while many cars in the United States are imported.

To be sure, automakers have many reasons to build factories in China, including proximity to low-cost suppliers as well as to customers in a big new market.


Trade Redo


Some of Mr. Trump’s advisers and Republicans in the House of Representatives want to replace America’s current taxes on corporate profits with a system that raises the costs of imports while helping exports.


Companies currently deduct practically all of their costs, including imports, from their sales revenue, and then pay taxes on the profits that are left. The new idea, sometimes called a border-adjusted tax, essentially involves ending the deductibility of imports so that they would be taxed. At the same time, profits on exports would no longer be taxed, and the overall tax rate would be cut. Big beneficiaries would be domestic factory owners and workers and big exporters like Boeing. But other countries might retaliate, and some Senate Republicans worry it could violate the rules of the W.T.O.


A border-adjusted tax would “mean a trade war not only between China and the U.S. but across the whole world,” said Wei Jianguo, a former Chinese vice minister of commerce. “China is firmly against it.”


The idea nonetheless has support among House Republicans, in addition to some of Mr. Trump’s supporters, although the president himself has called it “too complicated.” It has also divided businesses, with big importers opposed.


Rising Protectionism


Even before Mr. Trump took office, America’s taste for free trade was fading. While China protects many more of its industries than the United States does, China has also been moving faster to liberalize.


Global Trade Alert, a nonprofit based in Zurich that tracks and opposes protectionism, has documented 1,066 discriminatory American measures since the height of the global financial crisis in November 2008, including bailouts and subsidies for American companies, Buy America measures, tariff increases and other moves. Those are more measures than in any other country, although that may be partly because it is easier to document such measures in the United States, said Simon Evenett, the project’s leader. The American measures are also extremely narrow, affecting a small share of trade.


Mr. Wei said that the United States was wrong to feel threatened by China and should embrace free trade. Like many Chinese officials, he sees the Trump administration as motivated to a considerable extent by a fear of the rise of China, and added that “we don’t want the U.S. to have imaginary enemies in geopolitics.”

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