Donald Trump aims to target Chinese IT, consumer electronics and telecom goods in latest push to balance bilateral trade

While the U.S. Administration’s effort to reign in China’s aggressive trade policy which aims to subplant foreign technologies with domestic ones, it will have to streamline its apprach since its imposition of metal tariffs have largely undermined support from Europe. Both economies will have to collaborate to reign in Beijing’s runaway economic ambition.

As per two sources who had discussed the imposition of tariffs ob China by the Trump Administration, U.S. President Donald Trump is aiming to impose tariffs on Chinese imports of up to $60 billion.

These tariffs targets the tech and the telecommunications sectors, said the two sources.

Further, as per a third source with direct knowledge of the administration’s thinking, the tariffs, associated with the “Section 301” intellectual property investigation, under the U.S. Trade Act 1974, which began in August 2017, could come into effect “in the very near future.”

While Trump’s proposed tariffs mainly targets the IT, consumer electronics and the telecom sector, they scope could be much broader and could eventually run to almost 100 products, said the source.

The White House declined to comment on the size or timing of any move.

The Trump Administration’s hefty tariffs essentially targets Chinese high technology companies since China effectively forces U.S. companies to give up their tech secrets in order to tap cheap Chinese labor.

Washington is also targeting China’s intellectual property practices that it considers unfair.

Further, the Trump administration is also weighing the option of limiting investments by Chinese companies in the United States, over and above the heightened national security restrictions. Details on these were however not immediately known.

A U.S. Treasury spokeswoman did not immediately respond to requests for comment.

Lobbyists in Washington have expressed concerns over Trump’s tariff plan saying it those target labor-intensive consumer goods sectors such as apparel, footwear and toys, it would “hurt American families,” said Hun Quach, a trade lobbyist for the Retail Industry Leaders Association.

“We’re not talking about fancy cashmere sweaters, we’re talking about cotton T-Shirts and jeans and shoes that kids wear for back-to-school,” said Quach. “Alarm bells are ringing.”

With China having a $375 billion trade surplus with the U.S., when Chinese President Xi Jinping’s top economic adviser visited the country recently, the Trump Administration pressed him to come up with a solution that balances the trade between the two economies.

These tariffs are likely to draw a harsh response from Beijing.

“If this is serious, the Chinese will retaliate. The key question is, does the U.S. retaliate against that retaliation,” said Derek Scissors, a China trade expert at the American Enterprise Institute, a pro-business think tank.

However, given China’s U.S. trade surplus China’s position in the conflict could be delicate. “Their incentive to negotiate is to head us off from a major trade conflict,” said Scissors.

U.S. business groups have increasingly pressed the Trump Administration to take action on Beijing’s industrial policies, including its restriction to access its market and its “Made in China 2025” plan which aims to supplant foreign technologies with domestic ones.

Shortly after Trump took office, the Information Technology & Innovation Foundation (ITIF), a U.S. 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.

“China’s biggest worry has always been joint push-back from its major Western trading partners,” said a senior European diplomat.


Categories: Creativity, Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy

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