US to list China tariff increases
Trade tensions expected to ramp up over punitive moves against China
THE Trump administration will this week unveil the list of Chinese imports targeted for United States tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world’s two largest economies.
The list of $50-billion (R591-billion) to $60-billion (R709-billion) worth of annual imports is expected to target largely high-technology products and it may be more than two months before tariffs take effect, administration officials have said.
The US Trade Representative’s (USTR) office needs to unveil the list of products by Friday under President Donald Trump’s China tariff proclamation of March 22.
The tariffs are aimed at forcing changes to Chinese government policies that the USTR says result in the uneconomic” transfer of US intellectual property to Chinese companies.
The agency’s “Section 301” investigation authorising the tariffs alleges China has systematically sought to misappropriate US intellectual property through joint venture requirements, unfair technology licensing rules, purchases of US technology firms with state funding and outright theft.
China has denied that its laws require technology transfers and has threatened to retaliate against any US tariffs with trade sanctions of its own.
On Sunday, Beijing slapped extra tariffs of up to 25% on 128 US products including frozen pork, as well as wine and certain fruits and nuts in response to steep US tariffs on imports of aluminum and steel announced last month by the US.
Fears have arisen that the two countries will spiral into a trade war that will crush global growth.
US technology industry officials said they expected the Trump administration’s list to target products that benefited from Beijing’s “Made in China 2025” programme, which aims to upgrade the country’s domestic manufacturing base with more advanced products.
The state-led programme targets 10 strategic industries for replacing imports with Chinese-made products: advanced information technology, robotics, aircraft, shipbuilding and marine engineering, advanced rail equipment, new energy vehicles, electrical generation equipment, agricultural machinery, pharmaceuticals and advanced materials.
“Foreign technology acquisition through various means remains a prime focus under Made in China 2025 because China is still catching up in many of the areas prioritised for development,” the USTR said in its report justifying the tariffs.
US Trade Representative Robert Lighthizer has said that preserving America’s technological edge is the future of the US economy.
Reports that the tariff list may also include consumer goods such as clothing and footwear drew strong protests from US business groups, which argued that it would raise prices for US consumers.
While there have been contacts between senior members of the Trump administration and their Chinese counterparts since Trump announced his intention to impose tariffs, there has been little evidence of intensive negotiations to forestall them.
“The administration is following the Japan model from the 1980s,” a tech industry executive said.
“They’ll publish a Federal Register notice of tariffs on certain products, then try to reach a negotiated settlement over the next 60 days.”
During his first stint at the USTR in the Reagan administration, Lighthizer employed similar tactics to win voluntary Japanese export restraints on steel and motor vehicles.
Wendy Cutler, a former deputy USTR in charge of Asia negotiations, said addressing the sweeping intellectual property allegations identified by USTR would require major changes to China’s industrial policy.
A 60-day settlement may not be realistic in that case.