The Strategist

Is it possible to impose duties on creativity? US wants to restrict Chinese art import

09/12/2018 - 15:29

Chinese vases of the XII century are very different from consumer and industrial goods, imports of which the US wants to limit within the trade war with China. However, antiques and more modern works of Chinese art were included in the list of goods worth $ 200 billion in total, on which Washington can introduce 25% duties. This caused outrage among art dealers and collectors.

Gee Wang WONG
Gee Wang WONG
The administration of Donald Trump claims that the government is trying to protect American companies from China's dishonest trade policy. They say that the US wants to force Beijing to change it. Therefore, Washington has already introduced 25% duty on Chinese goods for $ 50 billion; Beijing responded to this with mirror measures. Now, the White House is holding public hearings to approve a new list of goods worth $ 200 billion in total. In recent weeks, hundreds of businessmen from various industries have been gathering in Washington to attend the hearings.

According to art dealers, tariffs on works of art cannot force China to change its trade policy, but will only lead to an increase in prices for them and will harm competition in the industry. According to the industry representatives, Beijing is already severely limiting export of antiques, and the proposed duties will affect even those items that American collectors buy in other countries, for example, in Britain or Japan. Finally, unlike steel, electronics and cars, Chinese antiques by definition cannot be produced in the US, many dealers point out.

The tariffs can hit hard on small art dealers in the US, because their European and Asian competitors will not have to raise prices. "I'm an innocent victim in the war of giants," says Eric Zetterquist, whose art gallery in New York specializes in Asian ceramics. "Nobody wants to be in this situation, especially because of their own government."

The Office of the US Trade Representative states that it chooses the goods in such a way as to minimize the damage to American consumers. Therefore, such items as collections of medieval ceramics of the Song Dynasty can fall under duties. Most of this collection, collected by a Japanese collector, was auctioned at Christie's in New York. One part was sold for $ 12.8 million in March, and the other - for $ 18.4 million more in 2016. If the tariffs are imposed, it will "never happen again" in the United States, said James Lally, managing galleries in New York and former President of the auction house Sotheby's in North America.

The main center of Chinese antiques trade is Hong Kong, while New York may become less attractive because of duties compared to the cities of Europe and Asia. Auction houses can transfer their business there. "They earn on interest from transactions. You cannot just increase the cost by 25%," - says art dealer from Boston James Callahan, specializing in Asian art.

On August 17, Christie's, Sotheby's and the Asia Week New York Association, representing the interests of art dealers, sent a letter to a US sales representative against the tariffs on art: "[They] are unlikely to help reduce the US deficit in trade with China."

"Many of the works come to the US from third countries," says Peter Tompa of the Global Heritage Alliance, which represents interests of museums and collectors. "Duties on their imports will not do any good, because China is already trying to get them back."