“We need to ask: why do we have a tariff on a tablecloth, but you do not have a tariff on a Fitbit or an Apple Watch? Why are we taxing the people who shop at Walmart, but we do not tax the people at the speciality store?” she asked, saying low-income families paid more in import taxes than the wealthy.
Lovely, a former economics professor at Syracuse University, said if the objective of imposing tariffs “is to reduce sales of Chinese firms that have profited from ill-gotten technology, coverage of high-technology imports should be increased”.
In April, the US consumer price index rose by 0.3 per cent month on month and 3.4 per cent year on year.
Lovely said trade-war tariffs “tax imports that have no obvious relationship to the cause for the original action”, citing previous analysis of the four waves of US tariffs imposed between 2018 and 2019.
“The structure of the trade-war tariffs raises basic questions about their efficacy and the fairness of their design,” she added.
Trade policies that embody greater clarity in the US position on … China will reduce the uncertainty that dampens the international flow of capital
Davin Chor of the Tuck School of Business at Dartmouth College in New Hampshire believed it was time to reconsider “which products exactly we care the most about because they are precisely the most strategic” as well as technology-intensive and knowledge-intensive.
“This is where we want American workers to be. Those are industries that add a lot of value, where we can be world leaders and pay high wages,” he said, adding that non-sensitive tariffs should be lowered.
Furthermore, Lovely said the US should be clearer in communicating strategic intent in its economic relationship with China to make the policies more effective.
“Trade policies that embody greater clarity in the US position on its relationship with China will reduce the uncertainty that dampens the international flow of capital and diminishes global growth prospects,” she added.
Jamieson Greer of the law firm King & Spalding, also testifying on Thursday, said “there is a growing consensus that China should not benefit from permanent normal trade relations (PNTR)” with the US because of the Asian giant’s unfair trade practices and its development into an adversary rather than a collaborator.
“It seems just completely malpractice from a policy perspective for US policymakers to be giving preferential permanent normal trade access to a competitor,” said Greer, who suggested the US revoke China’s PNTR status in phases.
“Be clear about what we want to do and articulate it and not have it be waving in the wind … have Congress itself, who controls trade regulation, come down and say, ‘Here is what we are going to do,’” he added.