US proposes $50 billion tariffs on 1,300 Chinese products
The United States today announced a proposed list of products imported from China that could be subject to additional tariffs of 25% amounting to $50 billion. The US Trade Representative (USTR) said the proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China's industrial plans while minimizing the impact on the US economy. Here's more.
Industries subject to proposed tariffs include aerospace, robotics, machinery
Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery. The list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing. After completion of this process, the USTR will issue a final determination on the products subject to the additional duties.
Door for talks with Trump administration is open: China
The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China's unreasonable technology transfer policies to the US economy, the USTR said. China had said yesterday that its door for talks with the Trump administration is open but if there is a trade war it will "fight till the end".
Beijing imposed tariffs on 128 US imports worth $3 billion
China's comments came a day after Beijing imposed tariffs on 128 US imports worth $3 billion as a retaliation against US duties on steel and aluminum. Last month, Trump announced that the US will impose tariffs on Chinese imports and take other actions in response to China's policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.
US cannot afford to have a $500 billion trade deficit
China's policies that coerce American companies into transferring to domestic Chinese enterprises bolster China's stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as "Made in China 2025". Trump raked up the issue of trade gap with China once again, saying the US cannot afford to have a $500 billion a year trade deficit with Beijing.
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"We have a problem with China. They've created a trade deficit, and I really blame our representatives and, frankly, our preceding presidents for this. They have a trade deficit of $500 billion a year. It's not something we can live with," said Trump.
Theft of intellectual property by China is around $200-300 billion
The theft of intellectual property alone, Trump said, is probably around $200-300 billion a year. "The US has to do something on trade with certain countries. And obviously, China is the leader in terms of deficits. We've never had a situation where a country, nor has there ever been in history, a situation where a country has done that to another country," he said.
Trump's tariff proposal opposed by several industry groups
However several industry groups were quick to oppose Trump's proposal to impose the tariff on some 1,300 selected Chinese products. "The Trump administration is right to push back against China's abuse of economic and trade policy, but imposing tariffs on producer goods will inadvertently hurt Americans through reduced capital investment and lower productivity growth," said Information Technology and Innovation Foundation President Robert D Atkinson.
"List of tariffs proposed would hurt companies in the US"
"The list of tariffs that the USTR has proposed today would hurt companies in the US by raising the prices and reducing consumption of the capital equipment they rely on to produce their goods and services," said ITIF President Robert D Atkinson.
Several US lawmakers supported Trump's move
However, several US lawmakers supported Trump's move. "Publishing this preliminary list is an important step that will allow US companies to evaluate the implications and convey their views about the effect of such tariffs on our economy. I'm confident that we can protect national security and minimize unfair trading practices while protecting American consumers and jobs," House Ways and Means Chairman Kevin Brady said.
China's theft of technology and intellectual property must be addressed
"We must address China's theft of technology and intellectual property belonging to American companies. It is a serious problem that requires action," said Ways and Means Subcommittee on Trade Chairman Dave Reichert.
