U.S. Continues with Plans on China Trade Tariffs

The Trump administration indicated to its Chinese counterparts that they were moving forward with their plans to impose tariffs on imported products from China, catching Beijing off guard.

The move, which is intended to restrict Beijing from accessing sensitive U.S. technology, came as a surprise after the White House had been saying for days that any trade war with China would be put on hold while negotiators on both sides worked on a deal to reduce the $375 billion trade deficit between China and the U.S.

According to The Wall Street Journal, the decision could give Commerce Secretary Wilbur Ross additional leverage in trade talks with China when he visits the country later this week.

A final list of $50 billion in imports from China, subject to 25% tariffs, will be announced by June 15, while investment restrictions aimed at preventing Chinese acquisition of U.S. technology would also be announced two weeks later, the White House said on Tuesday. The duties will be implemented not long after that.

Only hours later, China’s Commerce Ministry called the U.S. action “unexpected” but also “within expectations.” Chinese officials working to ease trade tensions were caught by surprise by Washington’s move, especially after negotiators led by Treasury Secretary Steven Mnuchin and his Chinese counterpart, Liu He, called a truce only days before.

People familiar with the matter said the U.S. announcement was not unexpected as Washington was under pressure to act tough on Beijing. Officials in China also see the move as a strategic way of exerting pressure on them ahead of Ross’ trip.

Some U.S.-China watchers agree Trump “is just trying to recreate leverage ahead of Ross’s trip to China so that, one, there’s more likely to be substantive progress, and two, he can claim to his domestic audience that whatever is achieved was because of these new threats,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

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