Trump to set punishing tariffs on up to $60bn of Chinese imports

Delegates attend a session of the Chinese People鈥檚 Political Consultative Conference in Beijing, where the country's trade relations with the US will figure prominently. (Reuters)

WASHINGTON: US President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday.
A third source who had direct knowledge of the administration鈥檚 thinking said the tariffs, associated with a 鈥淪ection 301鈥� intellectual property investigation, under the 1974 US Trade Act begun in August last year, could come 鈥渋n the very near future.鈥�
While the tariffs would be chiefly targeted at information technology, consumer electronics and telecoms, they could be much broader and the list could eventually run to 100 products, the source said
The White House declined to comment on the size or timing of any move.
In Beijing, Chinese foreign ministry spokesman Lu Kang said Sino-US trade relations should not be a zero-sum game, and that the two countries should use 鈥渃onstructive鈥� means to manage tension.
鈥淲e have said many times that China resolutely opposes any kind of unilateral protectionist trade measures,鈥� Lu told reporters.
鈥淚f the United States takes actions that harm China鈥檚 interests, China will have to take measures to firmly protect our legitimate rights.鈥�
Trump is targeting Chinese high technology companies to punish China for its investment policies that effectively force US companies to give up their technology secrets in exchange for being allowed to operate in the country, as well as for other IP practices Washington considers unfair.
The Trump administration is also considering imposing investment restrictions on Chinese companies over and above the heightened national security restrictions, but details on these were not immediately known. A US Treasury spokeswoman did not immediately respond to requests for comment.
But lobbyists in Washington expressed concern that Trump鈥檚 ambitious tariff plan would also include other labor-intensive consumer goods sectors such as apparel, footwear and toys.
Higher tariffs on these products would 鈥渉urt American families,鈥� said Hun Quach, a trade lobbyist for the Retail Industry Leaders Association.
鈥淲e鈥檙e not talking about fancy cashmere sweaters, we鈥檙e talking about cotton T-shirts and jeans and shoes that kids wear for back-to-school,鈥� she added. 鈥淎larm bells are ringing.鈥�
China runs a $375 billion trade surplus with the US and when President Xi Jinping鈥檚 top economic adviser visited Washington recently, the administration pressed him to come up with a way of reducing that number.
Trump came to office on a promise to shield American workers from imports and his first action as president was to pull the US out of the 12-country Trans-Pacific Partnership trade deal.
His administration is in the midst of negotiations to revamp the North American Free Trade Agreement (NAFTA) and last week announced the imposition of tariffs on steel and aluminum imports.
While the tariffs on steel and aluminum, announced last week by Trump, are viewed as relatively insignificant in terms of imports and exports, moves to target China directly risk a direct and harsh response from Beijing.
鈥淚f this is serious, the Chinese will retaliate. The key question is, does the US retaliate against that retaliation,鈥� said Derek Scissors, a China trade expert at the American Enterprise Institute, a pro-business think tank.
That would spook stock markets, but Scissors said that the more serious the conflict became, the worse China鈥檚 position would become, due to the importance of its US trade surplus.
鈥淭heir incentive to negotiate is to head us off from a major trade conflict.鈥�
The news website Politico earlier reported that the US Trade Representative鈥檚 office had presented Trump with a package of $30 billion in tariffs last week, but Trump told aides that this was not high enough.
One Washington business source who had discussed the issue with the White House said the figure had now grown to about $60 billion, with a potentially wider array of products under consideration.
A second person, who is an industry lobbyist in Washington familiar with the administration鈥檚 thinking, said the process was being led by Peter Navarro, an avowed protectionist, and by US Trade Representative Robert Lighthizer, who also favors tariffs as a tool to rebalance trade.
Speaking to reporters, US House Ways and Means Committee Chairman Kevin Brady stressed that Trump was serious about addressing the issue of intellectual property theft with China.
鈥淗e鈥檚 serious about calling their hand on this, and my understanding is they are looking at a broad array of options to do that,鈥� Brady said.
US business groups, while uneasy about triggering Chinese retaliation, have increasingly pressed Washington to take action on Beijing鈥檚 industrial policies, such as market access restrictions and the 鈥淢ade in China 2025鈥� plan, which aims to supplant foreign technologies with domestic ones.
Shortly after Trump took office, the Information Technology & Innovation Foundation (ITIF), a US technology think tank whose board includes representatives from top companies such as Apple, Amazon, Cisco, Google , and Intel, called for coordinated international pressure on Beijing.
While complaints about China鈥檚 abuse of intellectual property rights are not confined to the US, Trump鈥檚 global steel and aluminum tariffs announced last week under section 232 of the Trade Expansion Act of 1962 complicate US efforts to recruit allies to put pressure on China.
A senior European diplomat in Beijing said China would be relieved to see Europe and Washington at odds over the metals tariffs.
鈥淐hina鈥檚 biggest worry has always been joint push-back from its major Western trading partners,鈥� the diplomat said.
A China-based business source with knowledge of discussion among senior European officials said there had been a 鈥渃lear effort鈥� by the US government over the past six months to introduce a coordinated approach to Chinese industrial policy, but that Trump鈥檚 metals tariffs had undermined European support
鈥淪enior Trump administration officials had directly approached European leaders at a senior level. There had been a willingness to do something together on China. That鈥檚 impossible right now. You can鈥檛 cooperate when you鈥檙e getting whacked around,鈥� the person told Reuters.