President Donald Trump is expected to announce new tariffs on Chinese exports to the United States later today. The decision comes after a seven-month-long investigation by the Trump administration into the U.S. intellectual property theft orchestrated by Beijing. The move is expected to hit $50 billion worth of Chinese imports.


Earlier this month, President Trump’s hinted at raising tariffs on steel and aluminum imports, a measure opposed by the European Union — raising the prospects of a long-drawn trade war with Brussels and other trading partners.

Reuters news agency reported the detailed of the upcoming White House decision:

President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and stoke fears of a global trade war.

There was no indication of the size and scope of the tariffs, which U.S. Trade Representative Robert Lighthizer said on Wednesday would target China’s high-technology sector and could also include restrictions on Chinese investments in the United States. Other sectors like apparel could also be hit.

“Tomorrow the president will announce the actions he has decided to take based on USTR’s 301 investigation into China’s state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property,” the official said. (…)

The investigation by the United States under Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.

“China’s tolerance for pain is greater than the US” in case of a “trade war,” declared Hu Xijin, editor-in-chief of the Global Times, a Communist Party mouthpiece.

Hong Kong-based newspaper South China Morning Post also reiterated Beijing’s resolve to take “all necessary measures” in retaliation to any “punitive tariffs on Chinese imports”:

China warned US President Donald Trump on Thursday that Beijing will not “sit back” and let its interests to be harmed, ahead of an announcement from Washington on a new round of punitive tariffs on Chinese imports.

Sources familiar with Chinese government discussions said Beijing had been preparing a contingency plan to deal with escalating trade tensions with the United States. (…)

Despite China’s tough pronouncements, the newspaper hinted room for compromise:

On Wednesday, the Chinese consul general to the US offered easier access to China’s markets for foreign investors, promising reforms that would be “beyond expectations”.

Speaking at a China General Chamber of Commerce-USA event in New York, Zhang Qiyue said barriers would be removed or eased for foreign investors in the country’s financial sector and market entry standards would be the same for Chinese and foreign banks.

China, world’s second-largest economy, heavily depends on U.S. exports. The U.S.-China bilateral trade is estimated to be around $650 billion, with trade deficit tipped in favor of Beijing at around 385 billion.

Despite sustained economic growth, Beijing has already lowered it’s GDP projections for this year to 6,5 percent compared to last year’s 6,9 percent. A trade dispute with its biggest trading partners could force the Chinese economy to cool down further.

A protracted trade dispute with the U.S. could adversely impact Chinese leader Xi Jinping’s attempts to consolidate power. Xi Jinping recently abolishing presidential term limits and has embarked on an ambitious plan to merge China’s state television and radio stations to create a mega-broadcaster, arguably of the largest propaganda platforms in the world.

While the U.S. is disengaging from foreign conflicts under Trump, Beijing is stretching its capacities with recent military showdowns with Taiwan and India, both major military powers, over unresolved territorial disputes.

If China blinks first in this impending trade conflict with Trump, this would be perhaps the first time the Asian giant would make major concessions on trade-related matters since its transformation from a Communist system to a market-based economy. By taking on China over trade, President Trump could be making the biggest deal of his life.


[Author served as the press officer at the German Office for Foreign Trade in New Delhi]

Trump signed the agreement Thursday afternoon:

[Cover image via YouTube]