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Trump announces $60 billion tariffs on Chinese imports

By Lalit K Jha
March 23, 2018 09:37 IST
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US President Donald Trump on Friday imposed $60 billion (Rs 3.9 lakh crore) of tariffs on Chinese imports to punish the country for its “unfair” seizure of American intellectual property, a move that could escalate the already tense trade relations between the world’s two biggest economies.

Trump directed the US trade representative to level tariffs on about $60 billion worth of Chinese imports after a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations.

“We have a tremendous intellectual property theft problem. It’s going to make us a much stronger, much richer nation,” Trump said.

“This has been long in the making,” Trump told reporters in the White House at the ceremony while signing his memorandums targeting China’s economic actions.

Trump’s action comes a day after US Trade Representative concluded its Special 301 investigation against China and presented its report to him.


The USTR report concluded that China uses foreign ownership restrictions, including joint venture requirements, equity limitations and other investment restrictions to require or pressure technology transfer from US companies to Chinese entities.

“This requires taking effective action to confront China over its state-led efforts to force, strong-arm, and even steal US technology and intellectual property,” said US Trade Representative Robert Lighthizer.

“Years of talking about these problems with China has not worked. The US is committed to using all available tools to respond to China’s unfair, market-distorting behaviour. 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,” Lighthizer said.

Trump said his Section 301 trade action could be about $60 billion.

He instructed USTR to publish a proposed list of products and any tariff increases within 15 days and to pursue dispute settlement in the World Trade Organization to address China’s discriminatory technology licensing practices.

He also has directed the Treasury Secretary to address concerns about investment in the US directed or facilitated by China in industries or technologies deemed important to the country.

Trump said America’s trade deficit with China was a whopping $504 billion (Rs 32.8 lakh crore) per annum.

“According to some estimates it is $375 billion. But anyway you look at it, it is the largest deficit of any country in the history of our world. It’s out of control,” he said.

“But that’s really just a fraction of what we’re talking about,” he said, adding that he has asked China to reduce the trade deficit immediately by $100 billion.
“It’s a lot. That would be anywhere from 25 per cent, depending on the way you figure, to maybe something even more than that. But we have to do that,” he said.

Reiterating his use of word “reciprocal”, Trump said it was not good when they charge 25 per cent for a car to go in, and the US charges two per cent for their car to come into the US.

“That’s how China rebuilt itself. The tremendous money that we’ve paid since the founding of the World Trade Organization, which has actually been a disaster for us. It’s been very unfair to us. The arbitrations are very unfair. The judging has been very unfair. And knowingly, we always have a minority, and it’s not fair,” he said.

Trump alleged that China had been indulging in tremendous intellectual property theft worth hundreds of billions of dollars on a yearly basis.

“I’ve spoken to the president. I’ve spoken to representatives of China. We’ve been dealing with it very seriously,” he said.

“As you know, we’re renegotiating NAFTA. We’ll see how that turns out. Many countries are calling to negotiate better trade deals, because they don’t want to have to pay the steel and aluminium tariffs, and we are negotiating with various countries,” he added.

As per the USTR report, China imposes substantial restrictions on, and intervenes in US firms’ investments and activities, including through restrictions on technology licensing term.

These restrictions deprive US technology owners of the ability to bargain and set market-based terms for technology transfer. As a result, US companies seeking to license technologies must do so on terms that unfairly favour Chinese recipients.

“China conducts and supports unauthorised intrusions into and theft from the computer networks of US companies.

“These actions provide the Chinese government with unauthorised access to intellectual property, trade secrets, or confidential business information, including technical data, negotiating positions, and sensitive and proprietary internal business communications, and they also support China’s strategic development goals, including its science and technology advancement, military modernisation and economic development,” USTR report concluded.

Image: Trump directed the US trade representative to level tariffs on about $60 billion worth of Chinese imports after a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations. Photograph: Leah Millis/Reuters

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Lalit K Jha
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