Trump Orders US Trade Officials to Prepare Targets for Tariffs on $50 Billion in Chinese Goods

By Paul Eckert
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trump-trade-03222018.jpg U.S. President Donald Trump and trade officials after signing a plan to slap tariffs on about $50 billion in Chinese goods to retaliate against the alleged theft of intellectual property, in the White House, March 22, 2018.

U.S. President Donald Trump signed a presidential memorandum Thursday calling for tariffs on $50 billion of imports from China, but imposed a 60-day consultation period before they take effect, and proposed other measures aimed at cutting the $375 billion annual American trade deficit with Beijing.

In addition to the tariffs, which Trump said were "the first of many" trade actions and could cover as much as $60 billion worth of goods, Washington will tackle discriminatory Chinese technology licensing practices in the World Trade Organization (WTO) and examine China’s investment in critical U.S. industries and technologies.

The U.S. Trade Representative (USTR) has been tasked with producing within 15 days a list of products that could be targeted, and any decisions would be followed by a 60-day consultation period before tariffs go into force, officials said.

USTR has already identified 1,300 product lines worth about $48 billion as potential targets, the Associated Press reported.

“President Trump has made it clear we must insist on fair and reciprocal trade with China and strictly enforce our laws against unfair trade.  This requires taking effective action to confront China over its state-led efforts to force, strong-arm, and even steal U.S. technology and intellectual property,” said U.S. Trade Representative Robert Lighthizer.

“Years of talking about these problems with China has not worked.  The United States is committed to using all available tools to respond to China’s unfair, market-distorting behavior.  China’s unprecedented and unfair trade practices are a serious challenge not just to the United States, but to our allies and partners around the world,” he said in a statement.

The tariffs and investment restrictions fall under the USTR’s "Section 301" investigation into alleged Chinese theft of U.S. intellectual property and into Beijing policies which force U.S. investors to turn over key technologies to Chinese firms in exchange for access to China’s market.

"Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from U.S. companies ... establishing its own competitive advantage in an unfair manner," Everett Eissenstat, deputy director of the National Economic Council, was quoted by Reuters as telling reporters.

The independent Commission on the Theft of American Intellectual Property welcomes Trump’s actions on trade secret theft.

“This is the first time foreign intellectual property thieves face real consequences beyond hearing lectures. This is a solid first step toward dealing with Chinese economic aggression against this country. It is unlikely to be the last,” Admiral Dennis Blair, co-chair of the IP Commission, said in a statement.

Threat to retaliate

In a statement issued in Beijing before Trump issued Thursday’s directive, China repeated its threat to retaliate against U.S. measures.

"With regards to the Section 301 investigation, China has expressed its position on many occasions that we resolutely oppose this type of unilateral and protectionist action by the U.S.," Reuters quoted the Commerce Ministry as saying on Thursday.

"China will not sit idly by while legitimate rights and interests are hurt. We must take all necessary measures to firmly defend our rights and interests."

Analysts predicted China would target U.S. products such as soybeans and passenger aircraft that dominate exports to China, with an eye toward getting those industries to lobby against the tariffs. Rural America and the farm sector is seen as a key part of trump’s electoral base.

Soybeans accounted for $12.4 million of the $19.6 billion of U.S. agricultural exports to China in 2017.

In Geneva, Beijing's ambassador to the WTO, Zhang Xiangchen, told Reuters China is considering a WTO complaint against Trump’s tariffs, but had “other options.”

"This is a legitimate right for China to do that. But I would not exclude other options, because if the flood approaches you have to bank up to keep it out," he told Reuters.

"Appeasement of protectionism will not work. If you surrender to protectionism you will lose your credibility and leadership in this organization."

In Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying repeated a longstanding Chinese assertion, rejected by most economists and U.S. businesses, that U.S. export controls on some high-tech products were responsible for the trade deficit.

Hua added, however, that China still hopes it can hold constructive talks with the United States.


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