Trump hits China with $50B tariffs, investment restrictions

Aaron Brown
May 31, 2018

President Donald Trump is protecting American technology by reigniting a trade fight between the USA and China, White House trade adviser Peter Navarro said Wednesday.

In a brief statement, the White House said President Donald Trump is planning "multiple steps" to protect domestic technology and intellectual property from certain "discriminatory and burdensome trade practices by China".

The United States said on Tuesday that it still holds the threat of imposing tariffs on $50 billion of imports from China and will use it unless Beijing addresses the issue of theft of American intellectual property.

Washington will also press ahead with restrictions on investment by Chinese companies in the United States as well as export controls for goods exported to China, the statement from the White House said.

China's Commerce Ministry criticized Tuesday's announcement as "contrary to the consensus we reached" in talks in mid-May, when American officials postponed a tariff hike after Beijing promised to buy more USA goods.

A day after this newspaper reported a rallying cry from Xi to the nation's top scientists and engineers to turn China into a world hi-tech leader, the White House gave it immediate context by announcing that Trump would reveal restrictions on investments by Chinese entities to halt the transfer of "industrially significant" technologies, and enhanced export controls on technology aimed at China, by June 30.

The move has infuriated China, which on Wednesday lashed out and threatened to fight back if Washington is looking for a trade war, days ahead of a planned visit by US Commerce Secretary Wilbur Ross to Beijing.

In retaliation, China announced plans to impose new tariffs of 25 per cent worth Dollars 50 billion on 106 American products including items like soybeans which could hurt American farmers.

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The United States, Europe and other trading partners are pressing for reciprocal access as Chinese companies expand overseas while Beijing blocks or limits access to industries including banking, insurance, telecoms and health care.

Navarro stressed that "it's a trade dispute", not a trade war, in response to Mnuchin's suggestion that the "trade war was on hold".

China is ready to retaliate after the United States revived plans to hit it with new tariffs.

China accounts for the bulk of global production of numerous goods covered by Wednesday's tariff cuts.

In addition to the bilateral talks with Beijing, the United States also will continue to pursue the complaints filed in the World Trade Organization as well as the cases against individual products.

During the media briefing, the Foreign Ministry spokesperson also expressed concern over reports that the USA is planning to restrict visas of Chinese students studying advanced subjects like robotics, aviation and high-tech manufacturing to one year.

Trump has faced a backlash among lawmakers this month after announcing he would soften U.S. sanctions on the Chinese telecoms equipment maker ZTE, which neared collapse due to an April ban on purchasing crucial USA components. He said the two countries were in talks and had made "meaningful progress".

The American Chamber of Commerce in China has said it believes that threatening tariffs can be a useful tool to force Beijing to make more concessions at the negotiating table.

Other reports by Free-Prsite

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