China policy round-up: WTO says US China tariffs violate trade rules, ByteDance teams up with Oracle, HK fights ‘made in China’ order
In this round-up, the World Trade Organization rules that additional tariffs imposed by the Trump administration on some Chinese goods in 2018 breached international trade regulations, ByteDance makes progress on the sale of TikTok in the US, and Hong Kong asks Washington to drop its demand for the city’s exports to be labelled as ‘made in China’.
Chinese president Xi Jinping held a video call with senior European Union leaders on Monday evening. Xi said the China market will remain open to the EU, and urged the parties to work towards keeping an open environment for trade and investment.
Wang Shouwen, China’s vice commerce minister, said during a Tuesday virtual seminar with members of the US-China Business Council that the country will implement the phase one US-China trade deal faithfully, work to create a friendly business environment and welcome US enterprises to keep expanding their investments in the Mainland.
Tariffs imposed by the US on over $200bn of Chinese goods in 2018 were in violation of international trading rules, the World Trade Organization (WTO) concluded in a panel report this week.
Robert Lighthizer, the US trade representative, criticised the WTO’s ruling. “This panel report confirms what the Trump [administration] has been saying for four years: The WTO is completely inadequate to stop China’s harmful technology practices,” he said in a statement.
US president Donald Trump reportedly said he had to “do something about the WTO because they’ve let China get away with murder”.
A spokesperson at China’s Ministry of Commerce (Mofcom) said China made complaints to the WTO to protect its legal rights, and that the US should respect the ruling.
China’s general customs said on Tuesday that the country will continue to exempt certain US goods from additional tariffs for another year. With the extension, the exemption will last until September 16, 2021.
Last September, China announced it will exempt 16 import items from the US from the first round of tariff imposed on September 17, 2019. The list includes goods from the agriculture and animal husbandry industry, the medical equipment industry and the petro-chemistry industry.
ByteDance, the parent company of TikTok, has agreed to list TikTok on a US stock market after its proposed partnership deal with Oracle, the Financial Times reported on Friday morning Hong Kong time.
On Thursday, ByteDance, Oracle and the US treasury department agreed tentatively on the terms of Oracle’s bid for TikTok’s US operation, Bloomberg reported, citing people familiar with the matter.
Before that on late Wednesday, Steven Mnuchin, US treasury secretary, revised the term sheet to address national security concerns and both Oracle and ByteDance accepted the change, the wire added.
On Wednesday, Trump said he “conceptually” did not like Oracle’s bid for an alliance with TikTok. His comment came after the US Committee on Foreign Investment concluded that allowing the US company to become TikTok’s tech partner was insufficient to address the app’s access to US user data. However, Trump said he had not been informed of the agency’s conclusion when he made the comment.
Terry Branstad, US ambassador to China, announced on Monday that he would step down in early October. Branstad became ambassador in the summer of 2017.
The Hong Kong government has formally protested to the Trump administration on its decision to label products made in the special administrative region as “made in China”. The city’s government also requested the decision be withdrawn immediately.
Edward Yau, Hong Kong’s secretary of commerce and economic development, met with Paul Horowitz, acting US consul general, in Hong Kong on Wednesday.
“The US’s unilateral and irresponsible attempt to weaken Hong Kong’s status as a separate customs territory is highly inappropriate,” Yau told Horowitz, according to a Wednesday government press release. “Such a move also confuses the market and undermines the rules-based multilateral trading system.”
The US Justice Department clarified on Wednesday in a federal court filing that US WeChat users can continue downloading and using the app for sending messages without getting civil or criminal penalties. The move came after WeChat Users Alliance, a non-profit organisation, sued the US government for banning the app.
Laurel Beeler, a judge in the US District Court for the Northern District of California, said at a Thursday hearing that she is considering granting a preliminary injunction on Trump’s WeChat ban since the president’s order is too vague, Bloomberg reported.
The news came after WeChat users filed a motion in the San Francisco district court seeking a preliminary injunction.
Trump issued an executive order in early August, prohibiting transactions by any person or involving any property subject to the jurisdiction of the US with WeChat.