Trump’s tough talk on trade with China poised for action
Intellectual property, tariffs, quotas on table; some preach restraint.
The Tr u mp WAS HIN GTON — administration is setting the stage to unveil tough new trade penalties against China early next year, moving closer to an oft-promised crackdown that some U.S. business executives fear will ignite a costly battle.
Several corporate officials and analysts closely tracking trade policy said that President Donald Trump is expected to take concrete actions on a range of disputes involving China within weeks.
Trump is due by the end of January to render his first decision in response to petitions from U.S. companies seeking tariffs or import quotas on Chinese solar panels and washing machines manufactured in China and its neighbors.
U.S. trade officials in both cases already have determined that domestic manufacturers have been injured by surging imports and have recommended that he erect new trade barriers.
Trump could also order new limits on Chinese investment in the United States or raise tariffs unilaterally—a likely violation of U.S. commitments to the World Trade Organization — pending the outcome of a broader investigation into Beijing’s alleged failure to protect foreign companies’ intellectual property rights, analysts say.
And White House action is due on a separate Commerce Department probe triggered by worries about the national security impact of rising imports of Chinese steel and aluminum.
“Their intent is to bring shock and awe,” said Scott Kennedy, an expert on Chinese trade at the Center for Strategic and International Studies. “They’re not kid- ding around.”
On Dec. 6, Robert E. Ligh- thizer, the president’s chief trade negotiator, had a contentious discussion of administration trade policy with members of the US-China Business Council’s board of directors, which includes the chief executives of companies such as Chubb Insurance and General Motors, according to three executives familiar with the session who asked for anonymity to describe a confidential meeting.
During the closed-door Washington briefing for chief executives with business in China, Lighthizer said that U.S. complaints about Chi- nese trade practices could not be resolved simply by additional talks with Beijing, and he appeared indifferent to concerns that the administration’s hard line risked rupturing a $600 billion annual trade relationship.
“It did not go well,” said one person familiar with the exchange.
A spokeswoman for Lighthizer did not reply to a request for comment. The business group declined to comment on what it said was an off-the-record discussion.
It’s not yet c lear how extensive the administration actions will be. Trump’s repeated campaign vows to retaliate against China for policies that he says contributed to the loss of millions of U.S. jobs have yet to translate into concrete action. During a visit to Beijing last month, the president blamed his White House predecessors rather than Chinese President Xi Jinping for the yawn- ing bilateral trade deficit.
That gap has only grown since Trump became president, despite his “America First” rhetoric. Through the first 10 months of this year, the United States incurred a $309 billion trade deficit with China, up from $289 billion during the same period one year earlier.
“So far, it’s been the Teddy Roosevelt philosophy turned on its head: Speak loudly and carry a small stick,” said Scott Paul, president of the Alliance for American Manu- facturing, a nonprofit established by the United Steel- workers union and major steel makers.
Still, in recent weeks, there have been mounting signs of the president’s intention to act. In a new national security strategy, the president earlier this month described China as a strategic compet- itor and said that when it comes to trade, the United States “will no longer turn a blind eye to violations, cheating or economic aggression.”
The White House docu- ment was issued less than a month after the United States formally told the WTO that China did not qualify as a “market economy” under the trade body’s rules.
In a dispute with the European Union, China insists that it was promised the designation by now under the terms of its 2001 member- ship in the WTO. The European Union and the United States insist that the Chinese state’s role in the economy remains too large to justify granting China market econ- omy treatment. As a nonmar- ket economy, China is sub- ject to higher anti-dumping duties under U.S. trade law, making the issue more than a matter of bragging rights.
The president also previewed the tougherline in a speech last month in Danang, Vietnam, saying that the U.S. now expects its trade “partners will faithfully follow the rules just like we do.”
Administration officials say that China has not lived up to the bargain struck at the time of its accession to the WTO. Market liberalization has slowed or even reversed, especially since Xi became Communist Party general secretary in late 2012. Stateowned enterprises, which enjoy preferential government financing and permit approvals, remain formidable competitors for multinational corporations.
In a US-China Business Council survey, 57 percent of U.S. companies operating in China say they have yet to see any impact from a sweeping package of economic reforms Xi unveiled four years ago.
The trade decisions facing Trump in the next several weeks encompass a range of U.S. complaints: the dumping in U.S. markets of Chinese products such as solar panels, the theft of intellectual property and trade secrets, and economic damage caused by excess Chinese production in key commodities such as steel.
“There needs to be a fundamental, systemic change and a real commitment to market opening by China,” said one senior administration official. “We want China to stop stealing our stuff, live up to its commitment, and don’t distort the international trading system.”
The president has discretion in choosing whether and how to respond to the specific issues reflected in each of the pending cases. Already, the administration has delayed action on its investigation of the national security impact of rising steel and aluminum imports from China as it weighs the competing interests of companies that produce those materials and those that use them.
Potentially the most significant trade investigation examines China’s alleged theft of intellectual property and Beijing’s requirement that some foreign companies surrender their technology secrets in return for access to its 1.4 billion-person market.
That probe, widely expected to conclude that China is treating U.S. companies unfairly, could lead to new restrictions on Chinese investment in high-tech U.S. industries, several analysts said.