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20% Tariff Proposed on Chinese Goods

A bill to impose a tariff on Chinese agricultural products was introduced by U.S. Rep. Ted Budd (R-N.C.) to punish China for allegedly helping Russia’s war in Ukraine by buying additional shipments of wheat and barley.

The bill, introduced on March 17 as the “Stop China’s Financing of Russia’s Invasion Act,” requests that no later than 10 days after introducing the legislation, the U.S. Trade Representative must ascertain whether China’s purchases of wheat and barley on Feb. 1 were more than the previous year and indicates a willingness to use duties to ramp up pressure on the world’s second-largest economy.

If the purchases did in fact increase, the bill asks the U.S. president, using his authority under the International Emergency Economic Powers Act, to impose a 20 percent tariff on agricultural goods coming into the United States from China.

“By allowing an increase of its purchases of Russian agricultural products, China could effectively be giving a financial lifeline to the Putin regime. This bill would act as a warning to the Chinese Communist Party that continuing their economic partnership with Russia will have grave consequences,” Budd said in a statement.

The third-term congressman is running in this year’s election for the U.S. Senate seat in North Carolina. He was endorsed last summer by former President Donald Trump.

In 2020, the United States imported $3.8 billion in agricultural goods from China, the nation’s seventh largest supplier of agricultural imports, according to the U.S. Trade Representative’s office.

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The top five agricultural products imported from that country were processed fruits and vegetables valued at $896 million; food preparations at $327 million; dog and cat food at $202 million; fruit and vegetable juices at $198 million; and other livestock products at $193 million.

The bill would also ask the U.S. trade representative, Katherine Tai, to urge the World Trade Organization to condemn Russia’s actions in Ukraine, encourage China and other countries to not economically help Russia by increasing their trade with that country, and take steps to suspend Russia’s participation in the World Trade Organization.

Under the bill, the tariffs would be lifted as soon as China returned to its pre-Feb. 1 purchase levels of wheat and barley or if Russia ends its invasion of Ukraine.

Trade relations between China and the United States have been strained over the past four years, about one year after Trump took office in 2017. The former president wanted to reduce the trade and intellectual property imbalances between the two countries.

By mid-2018, the Trump administration had slapped a 10 percent tariff on $200 billion in goods coming in from China. Trump threatened to raise that to a 25 percent tariff in early 2019, but that didn’t happen.

After a series of back-and-forth threats and negotiations, the United States and China in early 2020 signed the Phase I deal intended to deescalate trade tensions. It called on China to buy an additional $200 billion worth of U.S. goods and services over the next two years to shrink the trade imbalance between the two countries.

That $200 billion was to be made up of around $77 billion in manufacturing, $52 billion in energy, $32 billion in agricultural goods and $38 billion in services.

According to a report by the Peterson Institute for International Economics, China bought only 57 percent of the U.S. exports it was committed to buy.