May 15, 1996 in Nation/World

U.S. Poised To Sanction China Goods Retaliatory Tariffs Will Be Announced Today

From Wire Reports
 

The Clinton administration, poised to retaliate against China’s “massive piracy” of American property, will announce major trade sanctions today against Chinese textile and electronics industries.

The action follows a futile attempt by U.S. trade officials to convince Chinese authorities to crack down on a $2 billion market in pirated American products, particularly videos, tapes, compact discs and computer software.

Talks in Beijing broke off Tuesday, prompting Acting U.S. Trade Representative Charlene Barshefsky to schedule a news conference to announce hefty sanctions in the form of high tariffs on certain Chinese exports to the United States.

The U.S. move, which China was expected to counter by placing higher tariffs on some American exports, could help President Clinton in states where the U.S. textile industry has been hurt by low-cost imports of Chinese-made clothing and in Southern California, where the entertainment and computer industries have suffered major losses to piracy in China.

In Washington state, Microsoft and Nintendo stand to gain hundreds of millions of dollars if Washington succeeds in ending piracy of computer disks and video games. But Boeing is bracing for retaliatory moves that are apt to single out its passenger jets as Beijing’s first counter-target. And Washington farmers could be on the losing side if China cracks down against U.S. agricultural exports.

Administration officials declined to discuss details of the U.S. action. But State Department spokesman Nicholas Burns said the sanctions were aimed at showing China “that we’re serious here, that we have to protect under international law our American manufacturers, who are being ripped off in China by Chinese pirates on CDs and videos” and other products.

The U.S. action reflects the general failure of the Intellectual Property Agreement that the Clinton administration reached last year with China to try to end the widespread violation of U.S. copyrights that underlies the piracy in China.

As a prelude to the Beijing talks, Barshefsky accused China of engaging in “the most onerous and egregious acts, policies and practices which have the greatest adverse impact on American goods.”

U.S. authorities have estimated that piracy of American goods in China cost U.S. businesses more than $1 billion a year in lost revenue.

Sen. Barbara Boxer, D-Calif., said that only pirated versions of some computer software products whose copyrights belong to U.S. firms are available in China.

Burns said China will have 30 days after imposition of the sanctions to comply with the agreement, an outcome that White House press secretary Mike McCurry indicated Clinton would welcome.

“The United States will remain open to avoid something that we believe is unnecessary because we believe it is in the interest of the United States and China to resolve these trade disputes amicably,” McCurry said. “We have to enforce the law, but we remain hopeful we can resolve this conflict short of titfor-tat retaliation.”

As word of the sanctions circulated in Washington, retailers raised a complaint. Their sales of Chinese-made goods are likely to fall as they raise prices to try to recover the higher costs of the tariffs.

Tracy Mullin, president of the National Retail Federation, said that the tariffs, which would take effect over the summer, would be felt most strongly by families shopping for school clothing.

“American families should not have to bear the brunt of these U.S. imposed tariffs,” she said. “There simply is no easy or cost-effective way to replace the goods on which the U.S. will impose these tariffs.”

The American Textile Manufacturers Institute, whose members’ textiles compete with China’s, applauded the anticipated decision.

MEMO: Cut in the Spokane edition.

Cut in the Spokane edition.

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