Washington urged to drop tariffs on drones

The United States' latest tariff push on drone imports, coupled with its accusation of "tariff evasion" by China, has heightened concerns that its increasingly unilateral and protectionist approach toward trade could further erode bilateral trust and disrupt global industrial and supply chains, said officials and experts.

Such tactics are likely to prove self-defeating, as punitive and discriminatory tariffs would raise US supply chain costs without delivering the manufacturing revival it seeks, they said, adding that dialogue and mutually beneficial cooperation offer the only practical way forward.

Their comments came as China's Ministry of Commerce urged the US on Thursday to immediately withdraw its Section 232 tariffs on imported drones and related components.

On Aug 13, the US announced Section 232 tariffs of up to 100 percent on certain imported drones and components, citing national security concerns — a move that the Financial Times said targeted Chinese drone technology.

Voicing strong opposition to the US move, Commerce Ministry spokesman He Yadong said it is a "unilateral and protectionist" action taken on the pretext of national security.

Chinese drones exported to the US are used mainly for civilian purposes, including agriculture and film and television production, he said, adding that such discriminatory treatment is seriously harming the interests of Chinese companies.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said the move is likely to disrupt the stability and resilience of global supply chains.

The Center for Strategic and International Studies, a think tank based in Washington, DC, said in an analysis last year that about 90 percent of the world's sintered magnets — high-strength permanent magnets used in drone motors — are produced in China.

On Aug 13, the Office of Trade and Manufacturing Policy at the White House released a report accusing Chinese exporters of routing goods through third countries to evade US tariffs. It identified more than 40 countries and jurisdictions as posing elevated risks of illegal transshipment.

He, the ministry spokesman, said the report "disregards facts and distorts the truth", branding normal international trade and investment as a "scam" and fabricating "a so-called shadow transshipment network".

The spokesman urged the US to immediately stop making irresponsible accusations and damaging Sino-US economic and trade relations, and instead work toward safeguarding the stability of global industrial and supply chains.

Shi Xiaoli, a professor of international economic law at China University of Political Science and Law in Beijing, said that any US assessment of "tariff evasion" should rely on verifiable transaction-level evidence, rather than broad estimates based on changes in trade patterns.

In another development on Thursday, the Commerce Ministry urged the European Union to swiftly correct its "wrongful practices" in a foreign subsidy investigation involving Chinese e-commerce giant JD.com, reiterating Beijing's firm opposition to Brussels' abuse of unilateral tools to suppress Chinese companies.

On May 28, the European Commission — the executive arm of the EU — opened an in-depth investigation into JD's proposed acquisition of German consumer electronics retailer Ceconomy.

"The EU has once again made unreasonable demands on banking institutions in China for extensive information held in the country that is unrelated to the investigation," said He, the spokesman.

China's Ministry of Justice, together with the Commerce Ministry and other departments, determined on Wednesday that certain cross-border investigative measures taken by the EU against Chinese entities in the case constituted improper extraterritorial jurisdiction. The decision has barred any organization or individual from complying with or assisting in the implementation of those measures.

Noting that China and the EU have established a trade and investment consultation mechanism, the spokesman urged Brussels to meet Beijing halfway and strengthen government-to-government communication.