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Supreme Court’s ruling adds to uncertainty in U.S.-China trade relationship

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Kathmandu. WASHINGTON (AP) — U.S.-China trade relations have plunged into more uncertainty after the U.S. Supreme Court struck down sweeping tariffs imposed by President Donald Trump. While Friday’s ruling gives Beijing a stronger hand, analysts say the situation will remain complicated because Trump still has alternative legal remedies to impose tariffs.

Ahead of Trump’s much-anticipated visit to Beijing, the two countries are trying to salvage a fragile trade ceasefire. Sun Yun, the China program director at the Stimson Center in Washington, said while the decision provides a “moral impetus” to China in pre-summit talks, it does not change much in practice.

The court ruled that the 1977 law does not give the president the authority to impose tariffs unilaterally on individual countries. Trump expressed dissatisfaction with the decision, increasing global tariffs from the temporary 10 percent to 15 percent and hinted at other legal avenues. Pointing to the huge trade deficit with China, he said the policy was necessary. “I have a very good relationship with President Xi, but right now he respects our country,” Trump said.

According to the White House, the meeting with Chinese President Xi Jinping is scheduled from March 31 to April 2. Ali Wen of the International Crisis Group said Xi could choose to strengthen his personal relationship with Trump rather than use the court’s ruling publicly, which could help sustain the trade ceasefire.

Liu Pengyu, spokesman for the Chinese Embassy, said the tax and trade war were not in the interest of any country and called for stability in the global economy through economic and trade cooperation.

The decision has also added to confusion among Asian and other U.S. trading partners. Dan Kreitenbrink of The Asia Group said he expects many Asian countries to act cautiously. Japanese Prime Minister Shone Takeichi is also being evaluated in Tokyo ahead of his upcoming visit to Washington.

Trump used emergency powers last year to impose tariffs on Chinese goods to 20 percent, which was later expanded to 34 percent in China. The situation reached triple digits after Beijing retaliated by raising its own tariffs. After a summit and phased talks in South Korea, the two countries agreed to a one-year trade truce with a 10 percent basic tariff.

According to Wendy Cutler of the Asia Society Policy Institute, the US administration is likely to come up with an alternative plan. He said that if China is found to have not fulfilled its obligations under the previous trade agreement, then there is a provision for re-taxing under US law. Representative Ro Khanna also called on the administration to adopt a tougher strategy against China’s alleged unfair trade practices.

According to Gabriel Wildau of Teneo, a consulting firm, Trump has hinted that he may use other legal grounds to reimpose the tariff, as he did in his previous term. However, Beijing is expected to persuade Trump to cut tariffs on the terms of purchase guarantees or other exemptions.

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