“Tariffs or threat of tariffs are a very useful and powerful negotiation tactic,” as the AmCham China chair put it.
The United States and China have been in an on-and-off fight over trade and tariffs for months. The market had just calmed down after U. S. Treasury Secretary Steven Mnuchin said that the United States was “putting the trade war on hold” a week ago — then U. S. President Donald Trump decided to pick a fight with China yet again.
On May 29, the White House announced a series of new actions against China regarding “technology technology transfer, intellectual property, and innovation,” as a follow-up step to protect U. S. domestic technology and intellectual property.
Among those actions was the threat of new tariffs. According to the announcement:
[T]he United States will impose a 25 percent tariff on $50 billion of goods imported from China containing industrially significant technology, including those related to the “Made in China 2025” program. The final list of covered imports will be announced by June 15,2018, and tariffs will be imposed on those imports shortly thereafter.
This new development came just days ahead of U. S. Commerce Secretary Wilbur Ross’ scheduled trip to China. As Xinhua confirmed last week, Ross, along with his team, is to visit Beijing from June 2 to 4 for another round of talks over trade disputes. Ross and Vice Premier Liu He, China’s chief representative on trade talk with Washington, spoke over the phone on May 25, Xinhua added, without elaborating.
Thus, Trump’s latest move looks like his usual tactic of raising the stakes before a showdown with Beijing.
