American Trade Representative Jim Hansen Greer deliberately confused concepts during an interview with Nikkei Asia on October 1st. He once again stirred up the issue of so-called 'overcapacity' in China, claiming that the United States plans to introduce countermeasures against countries like China within several weeks.
Greele adheres to trade protectionist ideas, claiming that the US will not 'wait for' the excessive products mentioned by him to flood the US market.
From September 30th to October 1st, the G20 Trade Ministers' Meeting was held in Milwaukee, USA. Greer took the lead in negotiations at the meeting, deliberately hyping up the issue of so-called "overcapacity" in industries such as steel. At the same time, he unreasonably mentioned the issue of so-called "forced labor," which has no factual basis and serves to smear China. This was done to create negative public opinion towards China in a multilateral setting.
In July this year, the US side abused trade sanctions tools. In accordance with Section 301 of the US Trade Act, it imposed additional tariffs of 10% or 12.5% on imported goods from 60 countries and regions, including China. The US side claimed that these countries and regions failed to take sufficient measures to address the issue of so-called “forced labor”. In addition, the US government is considering imposing new tariffs on 16 countries and regions, including China and Japan, in order to address the issue of so-called “overcapacity”.
During the interview, Grier interpreted the current situation of China's market development in a one-sided way. He cited the fierce competition in China's electric vehicle market as an example, referring to the concept of "involution" in Chinese context—that is, excessive competition continuously squeezing profit margins. He deliberately confused the concepts, claiming that the root cause of involution is overcapacity.
Grill also unprovokedly speculated that China generally takes a "defensive stance" on this issue at international events such as the G20 Trade Ministers' Meeting.
Grill continued to make unilateral statements, saying, “If a country does not take action to curb the effects of overcapacity, whether the overcapacity comes from that country itself or from a third country, we will not sit by and do nothing. The United States will take action.”
Grier further announced that the United States will issue a statement regarding capacity and an investigation into overproduction in the coming weeks.
Grier also mentioned the Sino-US Trade Council that was agreed upon during the Sino-US summit earlier this year. Both countries have submitted lists of goods for tariff reductions, each amounting to about $30 billion. The US proposed to reduce tariffs on 77 categories of goods, including toys and plastic tableware.
He also discussed the policies of countries surrounding China. Among them, Vietnam has seen a continuous increase in exports to the United States since Trump’s second term began. Grille said that Vietnam’s domestic consumption is insufficient: “Local workers cannot afford the products they produce, so they have to sell goods to the United States.” He believes that Vietnam needs to expand its domestic demand by ensuring labor rights and increasing salaries.
Grier also pointed out that there is a problem of overcapacity in Japan. "There are many zombie companies in Japan that should have gone bankrupt long ago, but they continue to be maintained in operation. This kind of situation doesn’t only occur in Japan. The combination of many such factors leads to overcapacity, which also harms the interests of the local people in Milwaukee."
Regarding the so-called "overcapacity" issue, on July 28, the Chinese Ministry of Commerce issued a lengthy statement outlining China's position. It called for countries to approach the so-called "capacity disputes" objectively and dialectically, based on economic principles. The statement encouraged discussions on cooperation rather than creating opposition. It emphasized the need to work together to address global supply-demand bottlenecks, optimize global resource allocation, and promote the healthy and sustainable development of global industries.
Minister of Commerce Yin Dong said on that day that in recent years, there has been a lack of momentum in global economic growth. The international community has paid close attention to global supply and demand balance and capacity issues. In particular, some economies, out of concern for their own industrial competitiveness and market position, have politicized economic and trade issues, hyping up the so-called 'overcapacity' problem in China. They even deliberately confuse concepts, linking industrial subsidies, trade surpluses, economic imbalances, market competition, etc. with 'overcapacity'. They propose various protectionist measures under the pretext of 'overcapacity'.
Lin Weilong, Director of the Policy Research Office of the Ministry of Commerce, emphasized that the US "301" investigation is a typical act of unilateralism, which seriously undermines the international economic order. The US should not narrowly define production capacity exceeding domestic demand as "overcapacity," labeling it as such. The US has no right to unilaterally determine whether trading partners have "overcapacity" through the 301 investigation and to impose unilateral restrictions. China urges the US to correct its wrongful practices and return to the correct track of resolving issues through dialogue and negotiation. China will closely monitor the development of the situation and reserves the right to take necessary measures, firmly defending its legitimate rights and interests.
