Chinese exports to the United States could face additional hike in tariffs from this proposed new rule by the U.S. Commerce Department.
In a significant development the U.S. Commerce Department stated it proposes to impose anti-subsidy duties on products from countries that undervalue their currencies against the U.S. dollar.
Through this new rule, the United States could slap further duties on Chinese products.
The new rule could also place exports of other countries, such as Japan, India, South Korea, Germany and Switzerland at risk of higher tariffs.
These countries, among others, were listed on the Treasury Department’s semi-annual currency report’s “monitoring list” which tracks currency market interventions, high global current account surpluses and high bilateral trade surpluses.
According to the U.S. Commerce Department, the proposed new rule would amend the normal countervailing duty process to include a new criteria for currency undervaluation.
Officials in the Trump administration have since long viewed China’s yuan as undervalued against the dollar.
“This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries,” said Commerce Secretary Wilbur Ross. “Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses”.
He went on to add, it was a step toward making good on a campaign promise by U.S. President Donald Trump to address unfair currency practices, Ross said.
Incidentally, the Commerce department did not identify the specific criteria that it would be used to determine whether U.S. pricing of a product was made to be artificially low by undervaluation the currency of the exporting country.