Senior U.S. officials say counterfeit and banned products made in China are flooding into the United States every day, endangering U.S. markets and the safety of its citizens. Senators in Congress have introduced a bill calling for the revocation of China’s most-favored-nation status in trade. Trade experts and analysts say the bill, if passed, would give the President and Congress leverage to check and balance China and institutionalize greater scrutiny of China.
U.S. Customs and Border Protection Commissioner Mark Morgan and President Trump’s economic and trade advisor Peter Navarro wrote a joint commentary on Fox Business News on Wednesday (Sept. 23) that counterfeit products from China are flooding into the United States every day and the United States must take steps to stem the dangerous tide.
According to the article, a special U.S. Customs and Border Protection (CBP) inspection of small packages originating primarily from China found that during a 14-month “blitz,” 13% of packages marked “Made in China” contained a counterfeit product or other contraband.
On a daily basis, about 700,000 small “Made in China” parcels flooded into the U.S. every day. 68% of them were sent by the U.S. Postal Service. Sixty-eight percent of them are processed by the U.S. Postal Service at ports of entry. The rest of the air parcels are handled by private carriers such as DHL, FedEx, and UPS. Nearly 90,000 Americans are victimized by these Chinese counterfeit products every day.
In the past few months, residents of many U.S. states have received suspicious packages of seeds suspected to be from China. Agriculture security officials warned that the seeds from unknown sources that the recipients did not order were likely invasive species that could undermine agricultural, environmental and ecological security.
Morgan and Navarro said the Trump administration is strongly committed to ending the sending of Chinese-made counterfeit and contraband goods to the United States in small packages and to eliminating the role that e-commerce platforms play in facilitating such illegal trafficking.
Chen Zhaohui, a professor at the University of Virginia’s School of Business, told VOA that it has been common practice in the past for the U.S. government to enforce stricter laws and regulations on the Chinese government in hopes of deterring Chinese manufacturers from exporting illegal and dangerous goods to the United States. President Trump has stepped up this effort since taking office and has been successful in winning China’s cooperation.
“A good example is the case of fentanyl. But in recent years, as U.S.-China relations have deteriorated, this approach has been less effective. The alternative, as suggested in their article, is to enforce the law within the United States,” said Chen Zhaohui.
According to Chen, the U.S. government will have to impose fines and even criminal penalties on all parties involved in order to stem the tide of illegal and shoddy Chinese products flooding into the United States. Unfortunately, this will be costly for legitimate Chinese importers because they will be subject to more inspections and delays,” he said.
Liu Xuepeng, a professor of economics and finance at Kennesaw State University, told VOA that it would be nearly impossible to completely eliminate Chinese counterfeit and contraband goods from entering the United States. “First of all, this is a domestic problem in China, because the Chinese legal system is inadequate, resulting in the widespread availability of counterfeit goods. The entry of counterfeit and contraband products into the U.S. is an extension of the domestic problem. If we don’t solve the problem of counterfeit and shoddy products in China or other countries, it will be very difficult to solve it in the U.S.,” he said.
However, Liu Xuepeng believes that the U.S. can take some measures, such as taking strict management measures against Amazon, e-Bay, Alibaba and other e-commerce enterprises and asking them to strengthen their management. These measures should be very effective, because many well-known e-commerce companies care about their reputation on the platform and customer feedback.
Meanwhile, U.S. Senator Tom Cotton (R-Arkansas), a Republican from Arkansas, introduced a bill on September 17 that would propose that the United States remove China’s permanent most-favored-nation status, known as “permanent normal trade relations. China has enjoyed most-favored-nation (MFN) status with the United States for more than 20 years; if Cotton’s bill passes, the decision to grant MFN status to China would be an annual one for Congress and the president.
Chen Chaohui told VOA that if the bill passes, China’s trade status would revert to what it was prior to 2001, when it could face annual congressional rejection. “If the U.S. thinks China has gone too far on something, the U.S. has leverage to check and balance.”
However, Chen added, “This leverage for the U.S. is limited because China, which is currently in a trade war, can do the same thing. I think the bill, if passed, would make scrutiny of China more institutionalized and less dependent on the preferences and views of sitting presidents.”
Liu Xuepeng, a professor at Kennesaw State University, said, “Although it is difficult to make an accurate prediction without an accounting, the impact on China if MFN is eliminated would be enormous. The most-favored-nation treatment granted by the United States to China is the main benefit of China’s entry into the WTO. Since China’s accession to the WTO, China’s gross domestic product (GDP) has increased tenfold from 2010 to the present time compared to when it joined the WTO.
“If this benefit is suddenly gone, China’s loss is of course great. But the loss for the U.S. is also big because the U.S. is still very dependent on the Chinese industrial chain. So it will be a big challenge for both the U.S. and China in the short term,” he said.
Liu Xupeng told VOA that if the U.S. were to revoke China’s MFN status alone, China could theoretically still enjoy the MFN status of other countries. So if the U.S. can’t enjoy cheaper parts and components from China, but Germany, Japan or other Western countries can, if companies from those countries enter the U.S. market and compete with U.S. companies, the result will be that U.S. companies can’t compete with companies from other Western countries.
Recent Comments