Trump eyes tar­iffs on up to $60B of Chi­nese goods

Amid ris­ing trade ten­sions be­tween the U.S. and China, Pres­i­dent Trump is seek­ing to im­pose tar­iffs on up to $60 bil­lion of Chi­nese im­ports and will tar­get tech­nol­ogy and telecom­mu­ni­ca­tions, ac­cord­ing to sources

Daily Sabah (Turkey) - - Money -

U.S. Pres­i­dent Don­ald Trump is seek­ing to im­pose tar­iffs on up to $60 bil­lion of Chi­nese im­ports and will tar­get the tech­nol­ogy and telecom­mu­ni­ca­tions sec­tors, two peo­ple who had dis­cussed the is­sue with the Trump ad­min­is­tra­tion said late Tues­day.

A third source who had di­rect knowl­edge of the ad­min­is­tra­tion’s think­ing said the tar­iffs, as­so­ci­ated with a “Sec­tion 301” in­tel­lec­tual prop­erty in­ves­ti­ga­tion, un­der the 1974 U.S. Trade Act be­gun in Au­gust last year, could come “in the very 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, this per­son said.

The White House de­clined to com­ment on the size or tim­ing of any move.

In Bei­jing, Chi­nese for­eign min­istry spokesman Lu Kang said Sino-U.S. trade re­la­tions should not be a zero-sum game, and that the two coun­tries should use “con­struc­tive” means to man­age ten­sion.

“We have said many times that China res­o­lutely op­poses any kind of uni­lat­eral pro­tec­tion­ist trade mea­sures,” Lu told re­porters.

“If the United States takes ac­tions that harm China’s in­ter­ests, China will have to take mea­sures to firmly pro­tect our le­git­i­mate rights.”

Trump is tar­get­ing Chi­nese high tech­nol­ogy com­pa­nies to pun­ish China for its in­vest­ment poli­cies that ef­fec­tively force U.S. com­pa­nies to give up their tech­nol­ogy se­crets in ex­change for be­ing al­lowed to op­er­ate in the coun­try, as well as for other IP prac­tices Wash­ing­ton con­sid­ers un­fair.

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. A U.S. Trea­sury spokes­woman did not im­me­di­ately re­spond to re­quests for com­ment.

But lob­by­ists in Wash­ing­ton ex­pressed con­cern that Trump’s am­bi­tious tar­iff plan would also in­clude other la­bor-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-to-school,” she added. “Alarm bells are ring­ing.”

China runs a $375 bil­lion trade sur­plus with the United States and when Pres­i­dent Xi Jin­ping’s top eco­nomic ad­viser vis­ited Wash­ing­ton re­cently, the ad­min­is­tra­tion pressed him to come up with a way of re­duc­ing that num­ber.

Trump came to of­fice on a prom­ise to shield Amer­i­can work­ers from im­ports and his first ac­tion as pres­i­dent was to pull the United States out of the 12-coun­try Trans-Pa­cific Part­ner­ship trade deal.

His ad­min­is­tra­tion is in the midst of ne­go­ti­a­tions to re­vamp the North Amer­i­can Free Trade Agree­ment (NAFTA) and last week an­nounced the im­po­si­tion of tar­iffs on steel and alu­minum im­ports.

While the tar­iffs on steel and alu­minum, 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 U.S. re­tal­i­ate against that re­tal­i­a­tion,” said Derek Scis­sors, a China trade ex­pert at the Amer­i­can En­ter­prise In­sti­tute, a probusi­ness think tank.

That would spook stock mar­kets, but Scis­sors said that the more se­ri­ous the con­flict be­came, the worse China’s po­si­tion would be­come, due to the im­por­tance of its U.S. trade sur­plus.

“Their in­cen­tive to ne­go­ti­ate is to head us off from a ma­jor trade con­flict.”


The news web­site Politico ear­lier re­ported that the U.S. Trade Rep­re­sen­ta­tive’s of­fice had pre­sented Trump with a pack­age of $30 bil­lion in tar­iffs last week, but Trump told aides that this was not high enough.

One Wash­ing­ton busi­ness source who had dis­cussed the is­sue with the White House said the fig­ure had now grown to about $60 bil­lion, with a po­ten­tially wider ar­ray of prod­ucts un­der con­sid­er­a­tion.

A sec­ond per­son, who is an in­dus­try lob­by­ist in Wash­ing­ton fa­mil­iar with the ad­min­is­tra­tion’s think­ing, said the process was be­ing led by Peter Navarro, an avowed pro­tec­tion­ist, and by U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer, who also fa­vors tar­iffs as a tool to re­bal­ance trade.

Speak­ing to re­porters in the Capi­tol, U.S. House Ways and Means Com­mit­tee Chair­man Kevin Brady stressed that Trump was se­ri­ous about ad­dress­ing the is­sue of in­tel­lec­tual prop­erty theft with China.

“He’s se­ri­ous about call­ing their hand on this, and my un­der­stand­ing is they are look­ing at a broad ar­ray of op­tions to do that,” Brady said.

U.S. busi­ness groups, while uneasy about trig­ger­ing Chi­nese re­tal­i­a­tion, have in­creas­ingly pressed Wash­ing­ton to take ac­tion on Bei­jing’s in­dus­trial poli­cies, such as mar­ket ac­cess re­stric­tions and the “Made in China 2025” plan, which aims to sup­plant for­eign tech­nolo­gies with do­mes­tic ones.

Shortly af­ter Trump took of­fice, the In­for­ma­tion Tech­nol­ogy & In­no­va­tion Foun­da­tion (ITIF), a U.S. tech­nol­ogy think tank whose board in­cludes rep­re­sen­ta­tives from top com­pa­nies such as Ap­ple, Ama­zon, Cisco, Google , and In­tel, called for co­or­di­nated in­ter­na­tional pres­sure on Bei­jing.

While com­plaints about China’s abuse of in­tel­lec­tual prop­erty rights are not con­fined to the United States, Trump’s global steel and alu­minum tar­iffs an­nounced last week un­der sec­tion 232 of the Trade Ex­pan­sion Act of 1962 com­pli­cate U.S. ef­forts to re­cruit al­lies to put pres­sure on China.

A se­nior Euro­pean diplo­mat in Bei­jing said China would be re­lieved to see Europe and Wash­ing­ton at odds over the met­als tar­iffs.

“China’s big­gest worry has al­ways been joint push-back from its ma­jor West­ern trad­ing part­ners,” the diplo­mat said.

A China-based busi­ness source with knowl­edge of dis­cus­sion among se­nior Euro­pean of­fi­cials said there had been a “clear ef­fort” by the U.S. gov­ern­ment over the past six months to in­tro­duce a co­or­di­nated ap­proach to Chi­nese in­dus­trial pol­icy, but that Trump’s met­als tar­iffs had un­der­mined Euro­pean sup­port.

“Se­nior Trump ad­min­is­tra­tion of­fi­cials had di­rectly ap­proached Euro­pean lead­ers at a se­nior level. There had been a will­ing­ness to do some­thing to­gether on China. That’s im­pos­si­ble right now. You can’t co­op­er­ate when you’re get­ting whacked around,” the per­son told Reuters.

Con­tain­ers at the Yang­shan Deep Wa­ter Port, part of the Shang­hai Free Trade Zone, Shang­hai, China.

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