Mon, Nov 18, 2024 page12

• Peru port could face US’ China tariffs

  TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said

  • Bloomberg
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  A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru.

  The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration.

  “Any product going through Chancay or any Chinese-owned or controlled port in the region should be subject to 60 percent tariff, as if the product was from China,” Claver-Carone said on Saturday in a telephone interview.

  

  A container is carried at China’s state-owned Cosco Shipping Chancay port in Chancay, Peru, in an undated photo.

  Photo: APEC Peru via REUTERS

  The duty would help guard against transshipment, Claver-Carone said.

  That is the process through which goods from one country — in this case China — enter another and then get re-exported to their final destination market — the US — at lower tariff rates than direct shipments.

  Transshipment in Latin America has been of particular concern to the US with regard to ports in Mexico, which overtook China as the US’ top trading partner following Trump’s trade war with Beijing.

  Such tariffs should make nations think twice about allowing Beijing to build a port in their territory, he said.

  “It’s a shot across the bow” to any country that partners on maritime infrastructure with China, including Mexico, he said.

  Chinese President Xi Jinping (習近平) inaugurated the new Chancay port in an elaborate ceremony with his Peruvian counterpart on Thursday.

  Xi boasted that the facility would establish a direct line from Chancay to Shanghai, cutting shipping times and lowering logistics costs.

  It is unclear how much of the shipments from the port would be destined for the US, given Peru and China are seeking to get goods from South America to Asia, and to import consumer goods meant for Peru and its neighbors.

  At a business event on Friday, Ren Hongbin (任鴻斌), a former official at the Chinese Ministry of Commerce, said he thinks the port might help facilitate trade between China and the US.

  Separately, a former top official at the Chinese central bank said on Friday that China would fight back if Trump follows through on his promise to impose a 60 percent tariff on Chinese imports.

  “If Trump and the administration really levy a 60 percent tariff on China, I think China will retaliate” and bring the case to the WTO, Zhu Min (朱民), a former deputy governor at the People’s Bank of China, said in an interview on Bloomberg Television.

  “There are many things they can do,” he said.

  Zhu, who is now chairman of the Chinese National Institute of Financial Research at Tsinghua University, did not specify the potential measures that could be taken in retaliation.

  However, he said the tariffs would impact the Chinese currency, which, he said, is determined by market forces such as trade and capital flows.

  The tariffs would also affect China’s demand for US Treasuries, he added.

  China is the second-largest foreign creditor to the US government after Japan, holding about US$775 billion in Treasuries.

  If the trade war were to escalate, “it would be tough things” for both countries, said Zhu, who also served as the deputy managing director at the IMF.

  “It would be nice if both sides can sit down, talk and cut a deal because, economically, both sides really complement each other,” he said.
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