Trump trade war: Tariffs readied for further $200b in Chinese imports

The Trump administration is preparing to slap tariffs on an additional $200 billion in Chinese imports, with the final decision expected at the end of August.
Written by Corinne Reichert, Contributor

United States President Donald Trump is escalating the nation's trade war with China, preparing tariffs on a further $200 billion worth of Chinese imports as the Office of the US Trade Representative proposes 10 percent tariffs across 6,031 Chinese product lines.

The office is accepting public submissions on the proposal, with hearings to be held between August 20 and August 23, after which a final decision will be made post-August 31, a senior administration official said.

Trump has warned that he could tax up to $550 billion in Chinese products, exceeding the US' total imports from China during 2017.

Republican Senate Finance Chairman Orrin Hatch called the announcement on Tuesday "reckless" and untargeted.

"We cannot turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy," Hatch argued.

Trump last week similarly confirmed that punitive tariffs would be slapped on Chinese imports worth $34 billion, with China preparing retaliatory duties of 25 percent on the same amount of US products.

"You have another 16 in two weeks, and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance," Trump said last week, referring to a previous threat that if China retaliates, Washington would raise duties on an additional $200 billion worth of Chinese goods -- roughly half of China's exports to the US.

According to research by Singapore's DBS Bank, an all-out trade war could shave off 0.25 percent of the GDP of both economies this year, with more damage expected in 2019.

Trump had started his trade war with China in March, imposing higher tariffs after saying an investigation by Trade Representative Robert Lighthizer had found that China is using foreign ownership restrictions to require tech transfers from US to Chinese companies, as well as conducting espionage to acquire intellectual property.

"We have a trade deficit, depending on the way you calculate, of $504 billion, now some people would say it is really $375 billion," Trump said at the time, adding that the tariffs could hit $60 billion worth of Chinese imports to America.

"Frankly, it's going to make us a much stronger, much richer nation."

Trump's administration has also been cracking down on all Chinese involvement in the American tech sphere, including with draft legislation barring the sale of national security-sensitive technology to China and blocking government or contractors from buying telecommunications equipment and services from Huawei and ZTE.

The heads of the CIA, FBI, NSA, and the director of national intelligence to the Senate Intelligence Committee had also recommended in February that Americans not use products from Huawei and ZTE.

Read more: Paranoia will destroy us: Why Chinese tech isn't spying on Americans

Last week, the Federal Communications Commission (FCC) was advised by the Executive Branch to deny China Mobile entry to the US telecommunications market, citing "substantial and unacceptable risk to US law enforcement and foreign intelligence collection".

Huawei similarly wrote to the FCC last week arguing that the US should not miss out on its market-leading technology, with its comments coming in response to the FCC's proposal to ensure Universal Service Fund (USF) funding is not spent on "equipment or services from suppliers that pose a national security threat to the integrity of communications networks or the communications supply chain" such as Huawei and fellow Chinese company ZTE.

Similar to its warnings that being banned from providing 5G equipment to Australia's telcos would threaten the nation's ability to stay "ahead of the game" in its mobile networks due to restricting competition, Huawei told the FCC that the US risks its "technological leadership" by banning Huawei.

In addition to saying the US should not miss out on its leading 5G technology, Huawei again argued that there has never been evidence of its equipment causing "actual harm or even potential harm to the network".

The Trump Administration is considering setting standards for a nationwide 5G mobile network to prevent Chinese dominance in the industry, alleged government documents leaked in January revealed.

Huawei's Australia CEO George Huang last week responded to calls for the technology giant to be barred from taking part in 5G rollouts due to concerns over sharing data with the Chinese government, telling ZDNet that the company handles no personal data.

"Huawei doesn't own, doesn't manage, doesn't operate any data," Huang told ZDNet.

"Huawei is just a network equipment vendor to the operators. Operators, they manage, they operate the network. The application of Huawei is to support our customers -- that means operators -- to build the system to manage those things.

"Huawei is just a vendor of the pipeline."

With AAP


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