Trump plows on ahead with plan to slap 25% tariff on $50 billion of Chinese imports
So, the trade war is back on already?
Donald Trump has thrown yet another curveball China’s way, announcing plans to follow through with a pledge to place significant tariffs on imported Chinese technology goods in the midst of trade negotiations and purportedly cooling tensions between the world’s two largest economies.
In a statement issued on Tuesday, the White House announced its renewed intentions to impose a 25 percent tariff on $50 billion in Chinese goods which contain “industrially significant technology.”
According to the White House, the final list of imports that will covered by this new tariff will be released on June 15th and the tariffs will be go into effect “shortly thereafter.”
The statement comes less than two weeks after Treasury Secretary Steve Mnuchin said that the White House was “putting the trade war on hold” following a visit to Washington by Chinese Vice Premier Liu He which ended with threats of tens of billions of dollars in tariffs being (temporarily) brushed aside to make way for negotiations.
Commerce Secretary Wilbur Ross will land in Beijing on Saturday to continue trade discussions with Chinese officials. Trump has repeatedly urged China to reduce its whopping trade surplus with the US. Meanwhile, China has vowed to respond to any tariffs from the US with tariffs of its own.
The White House’s surprise statement also announced that new “investment restrictions and enhanced export controls” would be implemented for “Chinese persons and entities related to the acquisition of industrially significant technology.”
The specific restrictions and controls are to be announced by the end of June and to be implemented “shortly thereafter.”
Of course, the fact that no specifics have been announced and that the tariffs and restrictions aren’t set to be enacted until the middle of next month at the earliest has led some to believe that this is just another one of Trump’s bluffs meant as a means of gaining leverage in trade talks.
Alternatively, the pledged tariffs could just as well soon be discarded. Reportedly, Trump’s team of negotiators is rife with infighting and divisions with no clear consensus on how hard they ought to hit China in following Trump’s vision. In Beijing earlier this month, a profanity-filled shouting match reportedly erupted between Mnuchin and Trump’s top China/trade expert Peter Navarro, a hardliner who was making his first known trip to the country. The Death by China author is said to have bestowed on Mnuchin the nickname “Neville Chamberlain.”
Either way, its obvious that China won’t be happy with this sudden swing back towards trade war. Here’s how China’s Commerce Ministry initially responded to the White House statement, via CNN:
We were both surprised by and expecting the statement issued by the White House. This statement is obviously in violation of the consensus reached in Washington recently by both China and the United States.
Regardless of what measures the US launches, China has the confidence, capability and experience in safeguarding the interests of the Chinese people and its core national interests. China urges the US to move in the direction of the spirit of the joint communique.
