Trump plans to punish US$60bn in Chinese tech and telecoms trade with new tariffs, sources say
The proposed tariffs, which would follow charges on steel and aluminium announced recently, are intended as retaliation against intellectual property theft
US President Donald Trump is seeking to impose tariffs on up to US$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’s thinking said the tariffs, associated with a “Section 301” intellectual property investigation, under the 1974 US Trade Act begun in August last year, could come “in the very near future”. The proposed tariffs are in addition to worldwide tariffs on steel and aluminium announced recently.
While the tech and telecom 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.
Washington is targeting Chinese high technology companies to punish them for China’s investment policies that effectively force US companies to give up their technology secrets in exchange for being allowed to operate in the country along with other allegations of intellectual property theft.
China runs a US$375 billion trade surplus with the United States and when President Xi Jinping’s 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 protectionist agenda and his first action as president was to pull the United States out of the 14-nation Pacific trade pact, known as the Trans-Pacific Partnership (TPP).
He has started talks to renegotiate the North American Free Trade Agreement (Nafta) and most recently imposed tariffs on steel and aluminium imports.
The news website Politico earlier reported that the US Trade Representative’s office had presented Trump with a package of US$30 billion in tariffs last week, but Trump told aides that this wasn’t high enough.
One business source who had discussed the issue with the White House said the figure had now grown to about US$60 billion, with a potentially wider array of products under consideration.
A second person, who is an industry lobbyist in Washington who is familiar with the administration’s thinking said the process was being led by Peter Navarro, an avowed protectionist, who has accused American companies of conniving with the Chinese state, and by US Trade Representative Robert Lighthizer, who also favours tariffs as a tool.
Speaking to reporters in the Capitol, US House Ways and Means Committee Chairman Kevin Brady stressed that Trump was serious about addressing the issue of intellectual property theft.
While complaints about China’s abuse of intellectual property rights are not confined to the United States, Trump’s global steel and aluminium tariffs announced last week complicate Washington’s efforts to recruit allies to help put pressure on China.
A China-based business source with knowledge of discussion among senior European officials said there had been a “clear effort” by the US government over the past six months to introduce a coordinated approach to Chinese industrial policy, but that Trump’s proposed metals tariffs under section 232 of the Trade Expansion Act of 1962 had undermined support from Europe.
“Senior Trump administration officials had directly approached European leaders at a senior level. There had been a willingness to do something together on China. That’s impossible right now. You can’t cooperate when you’re getting whacked around”, the person said.
