US art auction house seeks relief from Trump’s tariffs on Chinese goods

Bloomberg Columbus | Updated on November 01, 2019

Christies is seeking exclusions from 15 per cent duties on seven types of artworks and antiques

Christies was among the first companies to file for relief from the latest round of President Donald Trump’s tariffs on Chinese imports, arguing that the duties would hurt its business and punish the United States (US) art market.

The auction house is seeking exclusions from 15 per cent duties on seven types of artworks and antiques. These includes paintings, drawings, original sculptures, engravings, prints and antique furniture more than 100 years old, according to filings on Thursday. Christies said the tariffs would result in a significant loss to its US business by making it impossible to import the items.

It also will severely impact the US art market as a whole, drying up any ability to purchase Chinese artworks outside of the United States, Christies said in the filings. Punishing the US art market in this manner flies in the face of an important American value of support for the art world.

The Office of US Trade Representative started accepting requests Thursday through January 31 for exclusions from tariffs that took effect September 1 on about $110 billion in Chinese imports as Trump seeks to negotiate a trade deal with China. Duties are also in effect on $250 billion in other Chinese goods, and a separate batch of about $160 billion in products -- including laptops and mobile phones -- is set to be hit with tariffs on December 15 if a deal isnt struck.

Trump is seeking to sign a phase one agreement with Chinese President Xi Jinping in November, though Chinese officials are casting doubts about reaching a comprehensive long-term trade deal.

Exclusion decisions are based on whether a product is available only from China, is strategically important or related to Chinese industrial programs, and whether duties will cause severe economic harm to the company or US interests.

‘Chinese art in US not sufficient to meet demand’

While items produced by Chinese artists are available in other countries, the tariffs apply to all goods created in China, Christies said in the filings. Chinese art in the US is not sufficient to meet demand, and Christies said it sources one-of-a-kind Chinese items for its US-based clients because of the high demand.

Rather than hurting China, this tariff will help the art market in China and elsewhere by incentivizing collectors to sell their Chinese artworks outside of the US, Christies said.

Art dealers, collectors and museums previously sought to have Chinese art and antiquities spared from duties. Critics said the tariffs would discourage private collectors and dealers from acquiring Chinese art and cultural items, and because museums rely on donations, they and the viewing public would suffer. They also questioned the effectiveness of trying to spur US production or change China’s trade behaviour by targeting art.

China is the third largest art market in the world, accounting for 19 per cent of sales by value, behind the US at 44 per cent and the United Kingdom (UK) at 21 per cent, according to the Art Market 2019 report from Art Basel and UBS Group AG. Sales in the global art market reached $67.4 billion in 2018, up 6 per cent from the previous year, according to the report.

Published on November 01, 2019

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