Donald Trump has announced $50 billion of tariffs on China to punish the country for forcefully acquiring US intellectual property, triggering fears of a new trade war.
More than 1,000 products are expected to be impacted, with some time given for appeals before the tariffs come into effect.
Mr Trump also ordered the US Treasury to work up investment restrictions on China and a case in the World Trade Organisation [WTO] will also be pursued.
The action was taken after the Trump administration concluded that China’s attempts to acquire American technology had “unreasonably burdened US commerce”.
The White House is infuriated that China strong-arms US companies into handing over valuable technology in turn for access to its markets.
Senior White House officials claimed the move would have “minimal” blowback on US customers and that Mr Trump was “standing up for US corporations”.
One said: “Bottom line here, what the United States is doing is simply strategically defending itself against this particular form of economic aggression.”
However there are fears the move could trigger a trade war between the world’s two biggest economies after China threatened to retaliate.
The move is more significant financially than the US steel and aluminum tariffs announced earlier this year, affecting trade worth much more.
In a briefing call with journalists, senior White House officials claimed China’s vast trade surplus with America effectively robbed the US of around two million jobs.
One official effectively called time on the Richard Nixon drive to bring China in from the cold through engagement, saying attempts to change its behaviour through talks had “failed”.
Mr Trump’s team had “tried very, very hard” to work with the Chinese, the official said, adding: “With the Chinese in this case talk has not been cheap, it has been very expensive.”
Unlike the steel tariffs, the Trump administration appears united behind the move, with an official saying there was “not an inch of daylight” between senior figures.
The officials pointed to a strategy known as ‘Made in China 2025’, which outlines how the Chinese government hopes to become dominant in industries of the future such as artificial intelligence, robotics and quantum computing.
Officials did not reveal exactly which Chinese products would be hit by the tariffs but suggested ones linked to these industries would be targetted.
A senior White House official said: “This is a historic event and President Trump should be applauded for his courage and vision on this.”
He predicted “widespread support” for the move from US congressmen, businesses and labour representatives.
Before the announcement, the Chinese government said that it “will not hide” from a potential trade war with the US.
On Tuesday, Chinese Premier Li Keqiang said that he hoped that a trade war would be avoided and called for “calm”.
Hua Chunying, spokesperson for China’s Ministry of Foreign Affairs, said: “The Chinese side never wants to fight a trade war with anybody, but if we are forced to, we will not hide from it.” She added that China would “definitely take firm and necessary countermeasures to defend its legal rights.”
Following Miss Hua’s comments Chinese newspaper The Global Times, a government-controlled tabloid, said that the country had launched a “multi-faceted effort” to prepare for an “imminent trade war”.
On Wednesday, China also accused the United States of “repeatedly abusing” trade practices after the World Trade Organization ruled that Washington had not fully complied with a 2014 ruling against its anti-subsidy tariffs on various Chinese products ranging from solar panels and wind towers to steel cylinders and aluminium extrusions.
Jacob Parker, Beijing-based vice president of China operations at the US-China Business Council said the group wanted to know what action the US administration wants China to take to improve protection for intellectual property, and over forced technology transfer.
“It’s really important for them to lay that out so that we have a strategy going forward and it’s not just tariffs for tariffs’ sake.”
Parker said China needs to adopt a tougher deterrent against counterfeiting and IP theft, and do away with joint venture and business licensing requirements that can be used to mandate technology transfers to gain market access.
“At the moment, it’s very difficult for the two sides to sit down and talk because the Trump administration seems determined to go this way regardless of China’s manoeuvres,” said He Weiwen, a senior fellow at the Center for China and Globalization (CCG), a Beijing-based think tank.
In a possible sign of what is to come, Best Buy Co Inc , the largest US consumer electronics retailer, has decided to stop buying smartphones from Chinese telecom equipment maker Huawei, a source familiar with the matter told Reuters.
Analysts said US companies like Boeing Co, which sell billions of dollars worth of planes to Chinese airlines, as well as deals which require Chinese approval could also become caught in the cross fire should a trade war break out.
Article Source : https://www.telegraph.co.uk/news/2018/03/22/china-says-will-not-hide-trade-war-donald-trump-prepares-announce/