Tariff Fears Intensify
(Bloomberg) -- President Donald Trump signaled his intention to impose tariffs on $50 billion in Chinese imports and curbs on investments in sensitive technology, sending a hawkish message to Beijing days before the latest round of trade talks between the world’s two largest economies.
In a statement Tuesday, the White House said a final list of covered imports will be released by June 15 and the tariffs will be imposed “shortly thereafter.” It’s the most specific the administration has been about when the duties will take effect.
The White House also said new restrictions on Chinese investment and enhanced export controls will be announced by June 30, with implementation soon after.
“The United States will continue efforts to protect domestic technology and intellectual property, stop non-economic transfers of industrially significant technology and intellectual property to China, and enhance access to the Chinese market,” the statement said. “The United States will request that China remove all of its many trade barriers, including non-monetary trade barriers, which make it both difficult and unfair to do business there.”
It’s the latest twist in a trade dispute between the U.S. and China that has roiled financial markets and prompted the International Monetary Fund to warn of a trade war that could undermine the broadest global upswing in years. The announcement raises the stakes for the third round of talks between the two economies. Commerce Secretary Wilbur Ross is scheduled to meet with officials in Beijing on June 2-4 to continue negotiations.
Trump has vacillated in recent weeks on how hard to push Beijing over issues such as tariffs and intellectual property. The dispute began in March, when his administration threatened to slap tariffs on up to $50 billion in Chinese shipments to punish Beijing for violating American IP rights.
After Beijing promised to retaliate in kind to any duties, the president raised the ante to slap tariffs on an additional $100 billion in Chinese goods. However, the U.S. has yet to publish a list of target products for the $100 billion, and the White House statement makes no reference to the second potential tranche of duties.
Trump is under pressure from Congress to stay tough on China, especially Chinese telecoms-equipment maker ZTE Corp. Last week, the president said he would allow ZTE to stay in business after it pays a $1.3 billion fine, shakes up its management, and provides "high-level security guarantees.”
China pressed the U.S. to give ZTE a break after the Commerce Department cut off the company from U.S. suppliers to punish it for allegedly lying to American officials in a sanctions case. Republican Senator Marco Rubio and other lawmakers from both parties have criticized Trump’s leniency toward ZTE, arguing that doing business with the company presents a risk to national security.
When he announced the initial plan to impose tariffs, the president also instructed the Treasury Department to draw up new curbs on investments in the U.S. by Chinese companies. The Treasury has presented its findings to the president, but its conclusions haven’t been made public.
The latest signal from the White House sounds like the more hawkish wing of Trump’s trade team is trying to amplify its hard line, after Treasury Secretary Steven Mnuchin said this month that any talk of a trade war was suspended for now.
“Mnuchin’s ‘trade war on hold’ comments look to have been repudiated this morning, and possibly his investment stance, too,” said Derek Scissors, a China analyst at American Enterprise Institute in Washington. “It may be the administration has shifted somewhat to appease the Congress on the lifting of the ZTE sanctions.”
The White House statement also said the U.S. plans to continue litigation at the World Trade Organization for China’s intellectual-property practices.
Copyright 2018, Bloomberg