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US proposes 25% tariffs on Chinese imports

The US issued a list targeting 1,300 Chinese products.

The Trump administration has escalated its aggressive actions on trade by proposing 25% tariffs on 50 billion dollars-worth (£27 billion) of Chinese imports to protest Beijing’s policies that require foreign companies to hand over their technology.

China immediately said it would retaliate against the new tariffs, which target high-tech industries that Beijing has been nurturing, from advanced manufacturing and aerospace to information technology and robotics.

The Office of the US Trade Representative issued a list targeting 1,300 Chinese products, including industrial robots and telecommunications equipment. The suggested tariffs would not take effect right way: A public comment period will last until May 11, and a hearing on the tariffs is set for May 15.

Companies and consumers will have the opportunity to lobby to have some products taken off the list or have others added.

The latest US move risks heightening trade tensions with China, which on Monday had slapped taxes on three billion dollars-worth of US products in response to earlier US tariffs on steel and aluminium imports.

“China’s going to be compelled to lash back,” warned Philip Levy, a senior fellow at the Chicago Council on Global Affairs and an economic adviser to President George W Bush.

Early on Wednesday in Beijing, China’s Commerce Ministry said it “strongly condemns and firmly opposes” the proposed US tariffs and warned of retaliatory action.

“We will prepare equal measures for US products with the same scale” according to regulations in Chinese trade law, a ministry spokesman said in comments carried by the official Xinhua News Agency.

The US sanctions are intended to punish China for using strong-arm tactics in its drive to become a global technology power. These include pressuring American companies to share technology to gain access to the Chinese market, forcing US firms to license their technology in China on unfavourable terms and even hacking into US companies’ computers to steal trade secrets.

The administration sought to draw up the list of targeted Chinese goods in a way that might limit the impact of the tariffs – a tax on imports – on American consumers while hitting Chinese imports that benefit from Beijing’s sharp-elbowed tech policies. But some critics that American will end up being hurt.

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China US Trade

“If you’re hitting 50 billion dollars in trade, you’re inevitably going to hurt somebody, and somebody is going to complain,” said Rod Hunter, a former economic official at the National Security Council and now a partner at Baker & McKenzie LLP.

Even representatives of American business, which have complained for years that China has pilfered US technology and discriminated against US companies, were critical of the administration’s latest action.

“Unilateral tariffs may do more harm than good and do little to address the problems in China’s (intellectual property) and tech transfer policies,” said John Frisbie, president of the US-China Business Council.

Even some technology groups contending directly with Chinese competition expressed misgivings.

“The Trump administration is right to push back against China’s abuse of economic and trade policy,” said Robert Atkinson, president of the Information Technology and Innovation Foundation think tank. “But imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth.”

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