Hatim Khan – 26.03.2018 -The President of United States has announced a new set of tariffs, this time solely targeting China. Trump has often been outspoken about China’s trade practices and has accused them on numerous occasion of stealing American technology by putting restrictions upon firms to do business in China if they refuse to hand over their technology to Chinese firms. For this reason, Mr. Trump signed a directive that would target around 1300 consumer products from China and would translate in to a loss of around $50 billion in exports for them. Before signing the directive on Thursday, the US President said, “We have a tremendous intellectual property theft situation going on, which likewise is hundreds of billions of dollars”.
This directive comes after an eight months long case called “Section 301 investigation”, through which the US built a case showing that its companies had been forced by China to share their technology and intellectual property before they could do business in China. Many trade associations agree with this criticism of Chinese trade practice however have voiced concern regarding the methods being used by the US administration. This is because by taking unilateral decision rather than forming an alliance with other Countries who also criticize China for such practices will eventually harm US companies and consumers because US would isolate itself and become an open target for a tit-for-tat tariffs by China. President of National Foreign Trade Council, Rufus Yerxa mentioned this concern in a letter to congressional leaders, saying, “Premature, unilateral sanctions alone are unlikely to achieve this objective”.
As envisioned, China did not take too long to respond to such a directive from the US President. The following day, China’s commerce ministry proposed 128 US products to be targeted. The products include fruit, wine, pork and steel. Soybeans were not in the list as was expected as 37% of soybeans consumed in China come from the US and was worth almost $14 billion last year. Liu He, the vice premier of peoples republic of China speaking to Steven Mnuchin the US Treasury Secretary, said that China was capable of going toe-to-toe with the US tariffs as "China has already prepared, and has the strength, to defend its national interests”. However, he also said that China’s true intention is to come up with a bilateral solution to keep stable trade relations between themselves and US.
China is said to next target soybeans and aircrafts if the US tariffs targeting China increases and engulfs other products.