President Trump imposed steep tariffs on steel and aluminum imports on Thursday, singling out China as a top offender in an effort to curb what he has called unfair trade practices. But there is little evidence to support his dismissal of estimates that say Chinese steel accounts for only a small percentage of imports into the United States.
We fact-checked Mr. Trump’s targeting of China’s trade practices this week.
“Transshipping, frankly, is a big deal. China says it’s got 2 percent, but it sends much more.” — March 8
This lacks evidence.
Mr. Trump repeated this claim as he prepared to announce the tariffs. “I’ve watched where the reporters have been writing, 2 percent of our steel comes from China. Well, that’s not right,” Mr. Trump said at a news conference on Tuesday. “They transship all through other countries.”
“They send us a much, much higher level than that, but it’s called transshipping,” he added.
Transshipping refers to a practice in which one country exports a product to another country after it passes it through a third country. It is illegal when done to falsify or disguise the product’s country of origin and to evade duties and tariffs.
There is little evidence to support Mr. Trump’s claim that the volume of Chinese steel imports is “much higher” after transshipping.
First, the 2 percent estimate does not come from China, as Mr. Trump said, but from his own Commerce Department. Its data suggests that Chinese steel accounts for just 2 percent of total imports to the United States by quantity last year, and about 3.5 percent by value.
Asked to explain Mr. Trump’s claim, a White House official who spoke on condition of anonymity acknowledged that countervailing and anti-dumping duties have significantly reduced Chinese steel imports. The United States has imposed 24 trade remedies against steel from China, more than any other country, covering an estimated 90 percent of Chinese imports.
Asked for more details, the White House said in a statement that China had found ways to circumvent those barriers, simply by passing steel products through a third country. But, the statement said, “more often they are lightly processed into a new product (harder to quantify and catch) before being shipped Stateside.”
A Commerce Department report concluded in January that “an unknown portion” of Chinese steel exports to its Asian neighbors “are further processed in those countries and eventually shipped to the United States.”
Gary Hufbauer of the Peterson Institute for International Economics agreed that the amount of Chinese steel that is lightly processed in other countries and ultimately shipped to the United States is “a pretty difficult thing to measure.” But, he said, that that’s not the same thing as transshipment — because the steel has been modified from the original product.
Evidence of exporters’ masking steel products’ true Chinese origins by way of passing through a third country is largely anecdotal.
In one complaint, filed in 2016, United States Steel Corporation listed several examples of Chinese distributors offering to ship steel products to Vietnam, Malaysia, Thailand and Taiwan before docking in the United States.
But broadly, experts rejected the idea that the practice is so widespread as to mean that steel imports from China outnumber imports from Canada, Brazil, Mexico or South Korea — which together account for roughly half of foreign steel sent to the United States.
“You always get examples, just as you always get people crossing the red light,” Mr. Hufbauer said. “Genuine transshipment is pretty small, because customs would catch it.”
Linda Lim, a professor of international business at the University of Michigan, noted that none of the offending countries listed by United States Steel are, in fact, top steel exporters to the United States. Combined, imports from the four countries listed in the 2016 complaint would amount to just 6 percent of foreign steel.
“So even if there is falsification of origin, which I doubt, it is not sizable enough to suddenly turn China into a big exporter to the U.S.,” Ms. Lim said.
American importers who circumvent duties on Chinese steel through transshipping also face enormous civil and financial risk, said William Perry, an international trade lawyer and a former official at the United States International Trade Commission. Not only can United States Customs and Border Protection inflict penalties for past misdeeds, but businesses can also report their competitors for violations.
“Bottom line is that there are no statistics, because customs has not found many large and maybe not even a few transshipments involving Chinese steel,” Mr. Perry said. “As one Chinese friend used to tell me, transshipment is ‘too damn dangerous.’”
“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” — March 7
This is a garbled argument, and the $1 billion figure is most likely wrong.
Trade balances are relative. The United States has a trade deficit of about $337 billion with China. That means China has a trade surplus with the United States. “Their massive trade deficit with the United States” would mean that China imports more from the United States than it exports.
A $1 billion reduction would amount to a reduction of less than three-tenths of 1 percent of the American trade deficit with China. Mr. Trump’s figure is probably off by a factor of 100.
Two officials have confirmed to The New York Times that the United States did ask for a deficit reduction during talks with the Chinese last week, but the figure requested was $100 billion. It is unclear if the Chinese agreed. The Wall Street Journal reported the same $100 billion figure.
Keith Bradsher contributed reporting from Beijing, and Mark Mazzetti from Washington.