China trade war is back on
The Trump administration injects a fresh layer of uncertainty into its trade dispute with China, saying it would impose tariffs and other punitive measures on Beijing after all.
WASHINGTON — President Donald Trump, stung by criticism he has gone soft on China and less worried about Beijing’s ability to disrupt a potential summit with North Korea, reversed course on Tuesday and declared that the United States would impose tariffs and other punitive measures on China.
Barely a week after Treasury Secretary Steven Mnuchin said that the trade war was “on hold” and that tariffs would be suspended as negotiations continued, the White House issued a statement saying the U.S. would move ahead with its plan to impose 25 percent tariffs on $50 billion worth of imported Chinese goods within the next month.
Trump’s reversal was yet another twist in a long-running ideological battle in the West Wing between economic nationalists, who channel Trump’s protectionist instincts, and more mainstream advisers like
Mnuchin, who worry that tariffs and investment restrictions will hurt the stock market and hobble long-term growth.
The nationalists seem to have won this round. While Trump is sending Wilbur Ross, the commerce secretary, to Beijing this weekend to try again to resolve the dispute, people briefed on the talks said Trump was frustrated with the first round of trade negotiations and wary of giving Democrats an opening on one of his core issues.
The trade offensive comes at a sensitive moment, days after Trump pulled out of his planned June 12 meeting with the North’s leader, Kim Jongun, after suggesting that China played a role in derailing the encounter. But the president has since expressed more optimism about the meeting, and negotiators from Washington and Pyongyang have scrambled to reinstate it, giving Trump a freer hand to resume his tough approach to America’s greatest economic adversary.
In addition to the renewed trade threat, the United States has hardened its military posture toward China, canceling an invitation for the Chinese to take part in a large Pacific naval exercise and sailing two Navy warships past a handful of disputed islands in the South China Sea.
Last week, the administration announced a sweeping new investigation that could result in tariffs on imported automobiles — a move trade experts said was designed to ramp up pressure on Mexico and Canada in negotiations over the North American Free Trade Agreement.
On Friday, temporary exemptions to steel and aluminum tariffs that the White House granted to the European Union, Canada and Mexico are set to expire, raising the question of whether the countries will fold to Trump’s trade requests or retaliate.
Hours after the tariffs on China were announced, the Chinese Ministry of Commerce accused the White House of going back on its word, even as it hinted that Beijing expected such a move.
Trump’s handling of a Chinese telecom company, ZTE, became a flashpoint. On Friday, he said he had reached a deal that would allow the firm, which was recently banned from buying American components as punishment for violating U.S. sanctions, to remain in business. That prompted bipartisan criticism from lawmakers that he was backing off his tougher promises on trade and letting a Chinese telecom company that did business with Iran and North Korea off the hook.
Those swipes rankled Trump, according to current and former White House officials. In a midterm election year, they said, the president does not want to leave an opening to Democrats on trade. Trump expressed his unhappiness to Mnuchin, who had urged him to settle the ZTE issue and seek a trade truce with Beijing.
“There may be some momentary confusion, but his default position is, you’ll never get to the right of him on China,” said Stephen Bannon, who served as Trump’s chief strategist and is a leader of the nationalist movement.
On Tuesday, White House officials said that they would issue a final list of goods subject to the tariffs by June 15 and impose the duties shortly after that.