US (Washington Insider Magazine)— On Tuesday, The office of U.S. Trade Representative Katherine Tai revealed a further extension of China’s “Section 301” tariff exclusions on 352 Chinese imports and 77 COVID-19-related categories. It will last till May 31, 2024.
The administration of former President Donald Trump utilised Section 301 of the Trade Act of 1974. This statute aimed to prevent trade partners’ unfair practices in establishing the China tariffs in 2018 and 2019.
The import tariff exclusions include industrial parts such as pumps and electric motors, some car parts, bicycles, chemicals and vacuum cleaners. The COVID-related exclusions include medical equipment like face masks, gloves and hand sanitising wipes.
The exclusions were planned to expire on Dec. 31. Tai’s office said The extension till May 31 will allow for further review under a statutory four-year review.
U.S. President Joe Biden has included additional tariffs on Chinese exports under the previous Trump administration. Further, he added new regulations restricting the export of advanced semiconductors and the tools to make them, quoting security concerns.
Previously, Trump set tariffs in 2018 and 2019 on thousands of imports from China valued at some $370 billion. This decision came after a “Section 301” investigation discovered that China was stealing U.S. intellectual property and forcing U.S. companies to share sensitive technology to do business.
On the other hand, Tariffs on art are deteriorating China-US relations and worsening the ongoing trade war.
Fritz Dietl, the president and founder of art handler Dietl International, states, “US collecting or investment (as an asset class) in contemporary Chinese works of art has slowed to a trickle—a mere fraction of what it was pre-tariffs,” He also cites the sharp decline in stateside exhibitions of Chinese contemporary art since the duties’ implementation as discouraging evidence. “The issue goes both ways”, he adds. “US gallery participation at major art fairs in China is way down, and far fewer US art exhibitions are staged in Chinese museums.”
Chinese art and antiquities were initially exposed to a blanket tariff of 25%, presented in 2018 by the Trump administration across “a vast number of commodities.”
Sino-American art deals slowed from early 2020 to early 2023, mainly due to China’s action to close its borders to foreign travellers reluctant to quarantine for prolonged periods. However, the lack of a rebound since the mainland’s reopening to international tourists indicates the tariffs are hindering the trade.
Craig Yee, the founding director of the Beijing and New York gallery Ink Studio, states, “Geopolitical tensions affect the appeal of Chinese contemporary art in the US.” Further, he adds, “The tariffs make it financially unfeasible for us to scale commercial shows in the US of artwork created in China.”
“The tariffs have had a serious impact on the trade of Chinese works of art, antiques and antiquities with the United States,” expresses Dietl, adding that the condition “was made even worse by the pandemic that followed shortly after” their introduction. Even with the rate reduced to 7.5% from a peak of 25%, “it is still a high financial burden when you consider the value of many works of art”, Dietl states. Compared with the effect of the tariffs on mass-produced consumer goods from China, “the impact on the art market is severe”, he said.
The damage also outperforms the bottom line. “The entire cultural exchange between the two biggest economies and, one may say, the most important and influential countries in the world has come to a complete standstill—from art to student exchanges and beyond,” Dietl articulates. “This is not a question of appeal. It is a question of access. If we can’t see Chinese works, and China can’t see and access our cultural contributions, then a lot of understanding is lost. It will take time to rebuild from that.”
