Beijing is warning of a possible trade war — but also hinting it’s open to a compromise.
By Zeeshan Aleem@ZeeshanAleemzeeshan.
Mar 20, 2018, 2:40pm EDT
President Donald Trump is preparing to unveil his biggest crackdown on China yet: $60 billion worth of tariffs on Chinese exports to the US. The measure is intended to punish Beijing for stealing intellectual property from American companies.
The bold move — which is expected by Friday — has prompted China to promise to reform its trade and investment practices and hint that it could come to some kind of compromise with the US.
Analysts and the US business community contend that China forces many foreign businesses to hand over their most prized technology in exchange for access to China’s coveted market. It’s an unfair practice because China’s state-owned companies then have the ability to use that tech to develop their own products — and beat the foreign businesses at their own game.
The $60 billion in annual tariffs that the US plans to impose would be applied to more than 100 Chinese products like electronics that the Trump administration says were developed using stolen trade secrets. The total number of tariffs could change before the policy is formally unveiled.
The administration also says the tariffs should create American jobs by blocking foreign competition.
In early March, US Trade Representative Robert Lighthizer, a China hawk and proponent of tariffs, reportedly presented the president with a plan to hit China with $30 billion worth of tariffs. But Trump rejected the package and asked for something bigger. It’s now looking like the White House is going for double what his top trade official recommended.
US companies that rely on Chinese imports are unhappy about the move. A number of US industries have lobbied against the proposed tariffs, arguing that they’ll raise costs for their businesses and push up the price of the many cheap Chinese goods US consumers rely on, ranging from electronics to toys to footwear. A group of 25 retail giants including Walmart and Costco sent a letter to the White House on Monday petitioning against the tariffs.