$50 billion of China’s tech is latest tariff target

WASHINGTON — The Trump administration escalated its aggressive actions on trade Tuesday by proposing 25 percent tariffs on $50 billion in Chinese imports to protest Beijing’s alleged theft of American technology.

The Office of the U.S. Trade Representative issued a list of 1,300 Chinese products, including industrial robots and telecommunications equipment. The suggested tariffs wouldn’t take effect right way: A public comment period will last until May 11, and a hearing on the tariffs is set for May 15. Companies and consumers will

have the opportunity to lobby to have some products taken off the list or have others added.

The latest U.S. move risks heightening trade tensions with China, which on Monday slapped taxes on $3 billion in U.S. products in response to earlier U.S. tariffs on steel and aluminum imports.

“China’s going to be compelled to lash back,” warned Philip Levy, a senior fellow at the Chicago Council on Global Affairs and an economic adviser to President George W. Bush.

Indeed, China immediately threatened to retaliate against the new U.S. tariffs, which target the high-tech industries that Beijing has been nurturing, from advanced manufacturing and aerospace to information technology and robotics.

Early Wednesday in Beijing, China’s Commerce Ministry said it “strongly condemns and firmly opposes” the proposed U.S. tariffs and warned of retaliatory action.

“We will prepare equal measures for U.S. products with the same scale,” according to regulations in Chinese trade law, a ministry spokesman said in comments carried by the official Xinhua News Agency.

The U.S. sanctions are intended to punish China for using strong-arm tactics in its drive to become a global technology power. These include pressuring American companies to share technology to gain access to the Chinese market, forcing U.S. firms to license their technology in China on unfavorable terms and even hacking into U.S. companies’ computers to steal trade secrets.

But some critics say that American businesses will end up being hurt.

“If you’re hitting $50 billion in trade, you’re inevitably going to hurt somebody, and somebody is going to complain,” said Rod Hunter, a former economic official at the National Security Council and now a partner at Baker & McKenzie LLP.

Representatives of American business, which have complained for years that China has pilfered U.S. technology and discriminated against U.S. companies, were critical of the administration’s latest action.

“Unilateral tariffs may do more harm than good and do little to address the problems in China’s (intellectual property) and tech transfer policies,” said John Frisbie, president of the U.S.China Business Council.

Even some technology groups contending with Chinese competition expressed misgivings.

“The Trump administration is right to push back against China’s abuse of economic and trade policy,” said Robert Atkinson, president of the Information Technology and Innovation Foundation think tank. “But imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth.”

Trump dusted off a Cold War weapon for trade disputes: Section 301 of the U.S. Trade Act of 1974, which lets the president unilaterally impose tariffs. It was meant for a world in which much of global commerce wasn’t covered by trade agreements. With the arrival in 1995 of the World Trade Organization, Section 301 largely faded from use.

China has been urging the United States to seek a diplomatic solution and warning that it would retaliate against any trade sanctions. Beijing could hit back at American firms that depend on the Chinese market: Boeing, for instance, or American soybean farmers, who send nearly 60 percent of their exports to China.