Trump's on again, off again strategy on China may backfire

Minnie Murray
June 1, 2018

The United States intends to impose restrictions on some of China's investments and customs duties of 25% on certain categories of its goods supplied to the USA market, the White House press service said on Tuesday.

US-China trade tensions have spiked once again after US President Donald Trump said he will proceed with a 25% tariff on US$50bn of goods imported from China.

By the end of June, the U.S. will announce investment restrictions and "enhanced export controls" for Chinese individuals and entities "related to the acquisition of industrially significant technology". The list of targeted goods will be announced by June 15 and imposed shortly after, the White House said.

The final list of items subject to the new tariffs will be released on June 15, with formal imposition of these duties occurring a few days later.

Noting that China is engaging in a systematic and multifaceted strategy to steal intellectual property, Gaetz alleged that beyond the economic costs, this theft presented significant concerns for national security.

However, the administration is torn between groups anxious about a trade war and hardliners calling for stronger action to counter the competitive threat posed by state-subsidised Chinese firms.

China said last month that it would respond to the U.S. tariff threat with similar measures on $50 billion of American exports, including aircraft, automobiles and soybeans.

Having already undermined U.S. national security interests by agreeing to China's precondition to trade talks by easing penalties on ZTE, the administration now appears to be saving face by rattling its saber with new deadlines on investment restrictions and tariffs on China, said Ways & Means Committee Ranking Member Richard Neal.

Such practices "champion Chinese firms and make it impossible for many U.S. firms to compete on a level playing field", the White House said.

Mr Trump had already fuelled uncertainty over trade talks with China, after saying last week that any deal between Washington and Beijing would need "a different structure".

Now Wilbur Ross, the U.S. Commerce Secretary, is planning to return to Beijing on Saturday for another round of talks in the ongoing trade and intellectual property dispute.

The overall effect on furniture remains unclear, although opponents and proponents of the tariffs have mentioned furniture in their public comments on the issue.

Hua said that the relevant US statement is obviously contrary to the consensus reached between the two sides in Washington not long ago.

After that meeting, the two sides announced that Beijing would buy significantly more US agricultural and energy products in a bid to reduce the bilateral trade deficit, and they said they established a framework for addressing technology trade irritants.

"We were both surprised by and expecting the statement issued by the White House".

Trump has frequently focused on the trade deficit, urging China to boost its imports and lower the gap by $200 billion, while China has refused to agree to any dollar amounts.

Trump administration officials last month proposed a ban on sales of crucial American technology to ZTE, a giant Chinese telecom company that employs 80,000 people. China had promised to retaliate in a move that threatened a tit for tat trade war.

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