President Trump lobbed another salvo in the administration’s trade strategy, moving to sign an order that paves the way for tariffs on China potentially amounting to as much as $60 billion, he said Thursday, covering approximately 1,300 products, according to administration officials cited in media reports (the list has yet to be released).
“This has been long in the making,” said Trump, who also went on to say he considers China a “friend” and expressed respect for President Xi Jinping.
Trump added that in speaking with President Xi, he’s asked China to reduce the trade deficit by $100 billion. In 2017, the U.S. ran a goods trade deficit of over $375 billion with China.
“The world I want to use is ‘reciprocal,'” Trump continued. “When they charge 25% for a car to go in, and we charge 2% for their car to come in to the United States, that’s not good. That’s how China rebuilt itself.”
The president signed a memorandum authorizing United States Trade Representative (USTR) Robert Lighthizer to move forward with a series of actions, including the potential imposition of approximately $60 billion in tariffs on imports of Chinese goods. The announcement comes as a part of the Section 301 probe launched in August 2017 — under the authority of the Trade Act of 1974 — which sought to assess unfair Chinese trade practices with respect to technology transfer and intellectual property. (The USTR’s complete Section 301 findings are available online.)
“President Trump has made it clear we must insist on fair and reciprocal trade with China and strictly enforce our laws against unfair trade. This requires taking effective action to confront China over its state-led efforts to force, strong-arm, and even steal U.S. technology and intellectual property,” Lighthizer said in a USTR release. “Years of talking about these problems with China has not worked. The United States is committed to using all available tools to respond to China’s unfair, market-distorting behavior. China’s unprecedented and unfair trade practices are a serious challenge not just to the United States, but to our allies and partners around the world.”
In the order signed by Trump, the president directs Lighthizer to:
- Publish, within the next 15 days, a list of proposed products to be subjected to tariffs (then, after a period of notice and comment, the USTR will publish a final list of products and tariff increases)
- Pursue action within the World Trade Organization (WTO) dispute framework to address unfair Chinese trade practices (with a report required from Treasury Secretary Steven Mnuchin within 60 days)
- Address concerns about investment in the United States “directed or facilitated by China in industries or technologies deemed important to the United States” (with a report required from Treasury Secretary Steven Mnuchin within 60 days)
“We have a tremendous intellectual property theft situation going on,” Trump said. “Which likewise, is hundreds of billions of dollars, and that’s on a yearly basis.”
Trump added he’s spoken with President Xi and Chinese trade officials, in addition to acknowledging the ongoing North American Free Trade Agreement (NAFTA) and U.S.-Korea Free Trade Agreement (KORUS) talks, plus talks with countries regarding potential steel and aluminum tariff exemptions. A number of countries have gained temporary exemptions from the tariffs, Lighthizer told the Senate Finance Committee Thursday, CNBC reported. The list includes the European Union, Australia, Argentina, Brazil and South Korea.
The announcements immediately impacted markets. The Dow Jones plunged more than 400 points at one point on the heels of the announcement Thursday morning. After a brief bounceback Thursday afternoon, the Dow continued to drop, falling by more than 700 points approaching closing time (a 2.89% fall).
In his comments Thursday, Trump also criticized the WTO, saying it has been a “disaster” for the U.S.
“It’s been very unfair to us,” he said. “The arbitrations are very unfair, the judging’s been very unfair.”