U.S. TO IM­POSE TAR­IFFS ON US$60B OF CHI­NESE IM­PORTS

US may broaden list to 100 prod­ucts and re­strict in­vest­ments

New Straits Times - - BUSINESS -

UNITED States Pres­i­dent Don­ald Trump is seek­ing to im­pose tar­iffs on up to US$60 bil­lion (RM234.15 bil­lion) of Chi­nese im­ports and will tar­get the tech­nol­ogy and telecom­mu­ni­ca­tions sec­tors, said peo­ple who had dis­cussed the is­sue with the Trump ad­min­is­tra­tion on Tues­day.

Another source said the tar­iffs, as­so­ci­ated with a “Sec­tion 301” in­tel­lec­tual prop­erty in­ves­ti­ga­tion, un­der the 1974 US Trade Act be­gun in Au­gust last year, could come “in the near fu­ture”.

While the tar­iffs would be chiefly tar­geted at in­for­ma­tion tech­nol­ogy, con­sumer elec­tron­ics and tele­coms, they could be much broader and the list could even­tu­ally run to 100 prod­ucts, said the per­son.

Trump is tar­get­ing Chi­nese high tech­nol­ogy com­pa­nies to pun­ish China for its in­vest­ment poli­cies that force US com­pa­nies to give up their tech­nol­ogy se­crets in ex­change for be­ing al­lowed to op­er­ate in the coun­try.

The Trump ad­min­is­tra­tion is also con­sid­er­ing im­pos­ing in­vest­ment re­stric­tions on Chi­nese com­pa­nies over and above the height­ened na­tional se­cu­rity re­stric­tions, but de­tails on these were not im­me­di­ately known.

But lob­by­ists in Wash­ing­ton ex­pressed con­cern that Trump’s am­bi­tious tar­iff plan would also in­clude other labour-in­ten­sive con­sumer goods sec­tors such as ap­parel, footwear and toys.

Higher tar­iffs on these prod­ucts would “hurt Amer­i­can fam­i­lies”, said Hun Quach, a trade lob­by­ist for the Re­tail In­dus­try Lead­ers As­so­ci­a­tion. “We’re not talk­ing about fancy cash­mere sweaters, we’re talk­ing about cot­ton T-Shirts and jeans and shoes that kids wear for back-toschool.”

China cur­rently runs a US$375 bil­lion trade sur­plus with the US.

While the tar­iffs on steel and alu­minium, an­nounced last week by Trump, are viewed as rel­a­tively in­signif­i­cant in terms of im­ports and ex­ports, moves to tar­get China di­rectly risk a di­rect and harsh re­sponse from Bei­jing.

“If this is se­ri­ous, the Chi­nese will re­tal­i­ate. The key ques­tion is, does the US re­tal­i­ate against that re­tal­i­a­tion,” said Derek Scis­sors, a China trade ex­pert at the Amer­i­can En­ter­prise In­sti­tute, a probusi­ness think tank.

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