After weeks of controversy, conflict, and rising tensions between the two countries, the Trump administration is preparing to place tariffs on tens of billions of dollars worth of Chinese goods.
The plan was finalized by trade officers and the Commerce and Treasury Departments before President Donald Trump arrived at last week’s G-7 meeting.
After the events of the summits with North Korea, however, the future of this plan is uncertain. Trump could request for the plan to be canceled in order to gain China’s cooperation in an attempt to denuclearize the Korean peninsula. The plans will be either confirmed or dropped by the end of the week.
The planned tariffs were first announced in early April when it was stated that the tariffs will be set at 25%, which is quite high in any trade context. This announcement came after several statements from the U.S. indicating that the “trade war” between the U.S. and China had been put to a halt while the negotiations were taking place.
In a public statement, the White House announced that: “The United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology.”
The tariffs are intended to limit China’s access to “industrially significant technology” in the U.S. and were designed in response to what the White House has called the country’s ‘unfair’ trade practices.
While the original tariffs were going to be applied to 50 billion dollars worth of Chinese goods, several products have either been added to or stricken from to the list of said goods. The original list featured 1300 categories of products that would be affected by the tariffs.
While it may seem as though Trump has become less convinced that the planned tariffs are appropriate, he did not demonstrate any change in beliefs during a press conference after the summit with North Korea.
Trump stated: “We have a tremendous deficit in trade with China, and we have to do something about it.” This belief has not necessarily been shared by national security officials, who think that international trade and the denuclearization of North Korea should be treated as completely separate subjects and that China will ultimately do what is most convenient for its well-being.
Trump’s belief that the tariffs should be implemented stems from the fact that China has been forcing U.S. companies to transfer technology to their local businesses. This has been considered a violation of the US intellectual property rules. However, as the Wall Street Journal pointed out, the tariffs may end up also hurting some American companies, since they usually produce some of the text exports from China and the taxes would end up affecting their own products.
It is believed that China is likely to retaliate against these tariffs. This belief was supported by a statement from Chinese Commerce Ministry, which reads:
“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.”
Featured Image via Wikimedia Commons
