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Trump to announce China tariffs, boosting fears of trade war


Reuters

Trump to announce China tariffs, boosting fears of trade war

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United States President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology that is likely to trigger retaliation from Beijing and stoke fears of a global trade war.

There was no indication of the size and the scope of tariffs, which U.S. Trade Representative Robert Lighthizer said on Wednesday would target China’s high technology sector and which could also include restrictions on Chinese investments in the United States. Other sectors like apparel could also be hit.

“Tomorrow the president will announce the actions he has decided to take based on USTR’s 301 investigation into China’s state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property,” the official said.

The investigation undertaken by the United States under the Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.

Lighthizer told the House of Representatives Ways and Means Committee, a top economic body, that the aim would be to minimize the impact of any tariffs on U.S. consumers.

China has threatened to retaliate by hitting U.S. agricultural exports if tariffs on Chinese imports worth up to $60 billion are announced by Washington.

“The remedies, in my judgment at least, would be one, doing something on the tariff front, and two, doing something on the investment front, and then perhaps other things,” Lighthizer, a lawyer and veteran trade negotiator said.

The United States runs a hefty trade deficit with China of $375 billion, caused largely by its savings deficit and rising budget deficit. Estimates of the cost of counterfeit goods, pirated software, and theft of trade secrets and could be as high as $600 billion, according to one influential study.

Talk of a global trade war emerged earlier this month when Trump announced hefty tariffs on steel and aluminum imports, aimed at hitting Chinese over-production, but which also hit key allies like Canada, Mexico and the European Union.

 Lighthizer conceded that China would likely hit back with measures on U.S. agricultural exports, particularly soybeans, and said if that happened, Washington would impose “counter-measures”, although he said that “nobody wins from a trade war”, a stance that appeared to put him at odds with Trump who has termed trade wars “good and easy to win”.

Since taking office, Trump has taken a hard line on trade, tearing up a 14-nation Pacific trade pact, threatening to pull out of the North American Free Trade Agreement with Canada and Mexico and imposing hefty steel and aluminum tariffs.

China has already identified agriculture as a U.S. weak point and has said it would target soybeans, a $14 billion a year business. America’s farm states heavily backed Trump in his presidential election win.

“China does not want to fight a trade war with anyone. But if anyone forces us to fight one, we will neither be scared nor hide,” Foreign Ministry spokeswoman Hua Chunying said.

“If, in the end, the United States takes actions that harm China’s interests then China will have to take resolute and necessary steps to respond to protect our legitimate interests.” (Reuters)

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