US tariff hike may breach trade rules: Birmingham

Trade Minister Simon Birmingham warns Trump may have breached international trade rules with latest tariff hike on Chinese goods.

Minister for Trade, Tourism and Investment Simon Birmingham, has warned the US may be in breach of trade rules with its latest tariff hike on Chinese goods.

Trade Minister Simon Birmingham has warned the United States may have breached international trade rules in its latest tariff hike on $US300 billion ($A441bn) of Chinese goods.

The ongoing trade war between the two global superpowers deteriorated further last week when US President Donald Trump threatened to raise tariffs on Chinese goods by another 10 per cent within four weeks.

The announcement on Twitter effectively ended a tariff truce struck between Mr Trump and Chinese leader Xi Jinping at the G20 conference in June.

...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...

— Donald J. Trump (@realDonaldTrump) August 1, 2019

But Senator Birmingham, who is in Beijing for negotiations on the 16-member Regional Comprehensive Economic Partnership trade agreement, told Sky News Australia the move could come under scrutiny from the World Trade Organisation.

“The application of those sorts of unilateral tariff actions is something that we have not welcomed and may well be (a breach of the rules),” he told Sky News this morning.

“But that is something for the independent processes to determine and to let them run their course.”

Mr Birmingham said a key concern was the negative impact the ongoing dispute was having on overall global trade levels and economic growth.

In 2017, growth was at 5.5 per cent, but the Organisation for Economic Co-operation and Development predicts it will fall to 2.1 per cent in 2019.

“That’s a significant drop,” Senator Birmingham said. “What that is doing is having a dampening impact on the rate of global economic growth, which is bad for jobs and business in China, the United States, in Australia and everywhere.”

Senator Birmingham also defended the strength of Australia’s relationship with its major trading partner despite ongoing tensions over the slowdown of Australian coal exports moving through Chinese ports.

“I’ve asked them to try to work with our authorities so that Australian businesses can better understand what those checks and how they’re being applied so that we can ensure efficiency there,” he said.

Australia's Foreign Minister Marise Payne and Defence Minister Linda Reynolds meet with US Defence Secretary Mark Esper and Secretary of State Mike Pompeo are meeting in Sydney today for the Ausmin talks.

He flagged that factors such as environmental checks or supply management may have played a part but said Australia would get to the bottom of the issue.

“Overall you’re talking about a relationship that has seen phenomenal growth year-on-year for a sustained period of time he said.

While Senator Birmingham said he hadn’t had the opportunity to have a “formal sit down” with his Chinese counterpart — Zhong Shan — he was happy to have received an invitation to return to China in September for further discussion.