Commerce secretary and billionaire investor Wilbur Ross recently referred to China as “the most highly protectionist of the big countries” in an interview with the Wall Street Journal, repeating a claim he made back in January.
But data seems to suggest otherwise.
Average tariff rates are actually higher in Brazil and India, two of the world’s other big countries, Zixuan Huang and Nicholas Lardy from the Peterson Institute for International Economics wrote in a recent note.
Referring to World Bank statistics, the duo noted how weighted average applied tariffs in Beijing stood at 3.4 percent, versus New Delhi’s 6.3 percent, Brasilia’s 8.3 percent and Washington’s 1.6 percent.
“China is a difficult investment environment for foreign firms in some industries, but its trade protection is modest, not significantly above that in large high-income economies like the U.S.,” Huang and Lardy said.
The 79 year-old Ross believes Beijing has “beautiful free-trade rhetoric” but in reality, it implements high tariff and non-tariff barriers to imports.
Huang and Lardy point out that China was a highly protectionist trading nation three decades ago, but it has reduced average statutory tariffs from 45 percent in the mid-1980s to 10 percent in 2015 in order to qualify for entry to the World Trade Organization.
Beijing has also abolished most of its non-tariff barriers, such as import quotas and licensing requirements, that were once pervasive, the analysts said.