WASHINGTON (AP) — The Clinton administration is set to target Chinese textile and electronics equipment for high import duties in a tooth-for-a-tooth retaliation for China’s churning out of pirated music disks and computer software.
Talks in Beijing to give Chinese officials a chance to rebut the American allegations of pirating failed to persuade the administration to hold back on sanctions, a senior U.S. official told The Associated Press on Tuesday.
The Chinese are accused of more than $2 billion in piracy, mostly of music tapes, compact disks and CD-ROM computer software. The number of fake CDs being made in China has risen to 200 million, officials said.
“We have to protect American manufacturers,” said State Department spokesman Nicholas Burns. “We are being ripped off.”
The administration will announce a list of Chinese products Wednesday on which it will impose a 100 percent tariff, essentially doubling the items’ price at the border, said a senior U.S. official, speaking on the condition of not being identified further.
Initially about $3 billion worth of imports will be targeted, but that amount will be winnowed down to something over $2 billion to match the amount of economic harm being done from pirated electronics software, according to U.S. trade sources.
The sanctions will not take effect until after a 30-day comment period that will allow U.S. importers to appeal the inclusion of certain products. This period also gives U.S. and Chinese negotiators time to possibly reach a last-minute agreement over the piracy issue.
How much of the increased cost would be passed onto consumers was unclear.
But the action could produce a boon for American apparel manufacturers hurt by inexpensive Chinese imports. For President Clinton, trying to make headway in the textile-rich South, it could be a political dividend in his race for reelection.
At the same time, American clothing retailers could be hurt.
The National Retail Federation accused the administration of unfairly singled out textile and apparel products “for the benefit of Hollywood moguls” who would benefit by stemming the pirating of music and video disks.
“There simply is no easy or cost-effective way to replace the goods on which the U.S. will impose these tariffs,” said Tracy Mullin, the federation’s president, in a statement.
Under threat of sanctions, China signed a trade accord in March, 1995, banning software piracy.
“Quite a bit of piracy continues,” said one senior U.S. official, requesting anonymity.
While an agreement could still be worked out, White House press secretary Mike McCurry sounded generally pessimistic about the outcome of the talks held Monday and Tuesday in Beijing.
“I haven’t heard anything to indicate they have made a lot of progress,” he told reporters.
“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 tit-for-tat retaliation.”
In Beijing, foreign minister spokesman Cui Tiankai also was pessimistic about the outcome of the talks.
Despite the dispute over the piracy issue, McCurry said the relationship between Washington and Beijing is broad and complex and that he has heard nothing to indicate the United States would end China’s “most favored nation” trade status.
That means permitting most Chinese imports — those not targeted for sanctions — to enter the United States with the same low duty imposed on imports from most other countries. Overall, China exports more than $40 billion in goods to the United States.
Meanwhile, Sen. Jesse Helms, R-N.C., sent a letter Tuesday to the acting U.S. trade representative, Charlene Barshefsky, urging immediate action against China.
The Senate Foreign Relations Committee chairman said China now diverts $8 billion in exports annually through Macau and other non-Chinese ports.