President Donald Trump's administration on Tuesday unveiled its list of roughly $50 billion in Chinese electronics, aerospace and machinery products it plans to hit with steep tariffs, the latest move in a deepening U.S.-China trade conflict.
The 25 percent import taxes are designed to penalize China for discriminatory policies that the United States says puts its companies at a disadvantage in the Chinese market. Trump has complained that the Chinese government forces U.S. companies to surrender their proprietary technology in return for access to the Chinese market and engages in cybertheft to acquire other American trade secrets.
The office of the U.S. trade representative released a list of 1,300 proposed tariff increases and said the public can submit written comments on the tariffs until May 11, and it will hold a public hearing on the proposed tariffs on May 15 in Washington.
In response, China vowed to take measures of the "same strength and same scope," with the Commerce Ministry saying today that it also would file a challenge against the U.S. move with the World Trade Organization. "These measures will be announced shortly," a ministry statement said.
[LIST: See all products targeted]
Trump's latest protectionist move threatens to upend global supply chains for corporations such as Apple and Dell, raise prices for American consumers who have grown accustomed to inexpensive products and aggravate tensions between the world's two largest economies.
"The pain will be very visible and the potential gains will be very abstract. The administration hasn't prepared the U.S. for the downsides of a trade war," said Brad Setser, of the Council on Foreign Relations and a former White House economist in President Barack Obama's administration.
Trump said March 22 that the tariffs were aimed at penalizing Beijing for what the U.S. alleges to be theft of American companies' intellectual property. The president's recent trade actions, which also include duties on steel and aluminum, have provoked concerns of a global trade war. China imposed tariffs of its own in response to Trump's actions on metal imports, and has threatened additional retaliation if he erects further trade barriers.
China's Made in China 2025 plan was announced in 2015, and highlighted 10 sectors for support on the way to China becoming an advanced manufacturing power: Information technology, high-end machinery and robotics, aerospace, marine equipment and ships, advanced rail transport, new-energy vehicles, electric power, agricultural machinery, new materials, and biomedical. In addition, China has a separate development strategy for artificial intelligence, published in 2017.
Congressional elections in seven months could pose a political challenge for the president, who promised his supporters he would overhaul U.S. trade policy to benefit American workers. Voters already disapprove of Trump's handling of trade policy by 54 percent to 34 percent in the latest Quinnipiac University poll, with only Republicans and white voters without a college education backing his tariff offensive.
[DOCUMENT: Read full proposal from U.S. trade representative]
In acting, the president swept aside opposition from business groups, which agree that China's mercantilist policies must be confronted, but fear the consequences of a tit-for-tat trade conflict.
"If history is any indication, these proposed tariffs will not work and will be entirely counterproductive. Tariffs penalize U.S. consumers by increasing prices on technology products and will not change China's behavior," said Dean Garfield, chief executive of the Information Technology Industry Council, which represents companies such as Apple, Dell, IBM and Google. "Instead, the administration should act consistent with international obligations and work with other countries to address systemic issues with China."
In compiling the list, U.S. officials used algorithms to identify products that benefited from China's state-directed campaign of technology acquisition while eliminating those whose inclusion would disrupt the U.S. economy.
The list was drafted to achieve "the lowest consumer impact," according to Robert Lighthizer, the U.S. trade representative.
Parts for trash compactors, molds for the manufacture of semiconductors, motors, generators, cassette players, smart cards and high-definition color video projectors dotted the list along with unlikely items like rocket launchers and torpedoes.
China has opposed Trump's tariff plan, calling it "self-defeating" and vowing to fight a trade war if the U.S. persists.
If China responds to this latest tariff action on a dollar-for-dollar basis, it could damage more than one-third of total U.S. exports to China and Hong Kong, according to Setser. The U.S. shipped more than $130 billion in goods to China last year, plus an additional $40 billion to Hong Kong, much of which flows through the port city to the mainland.
U.S. farm groups are especially worried about being caught in the crossfire. China's response to Trump's steel and aluminum tariffs landed hardest on the agricultural sector, including products such as fruit, wine and pork.
Future Chinese action is likely to hit the farm belt even harder. The U.S. exported $12.4 billion worth of soybeans to China last year, according to the U.S. Department of Agriculture, down almost 13 percent from the year earlier, as Chinese buyers began turning to alternative suppliers such as Brazil.
In Evansville, Ind., Joe Steinkamp, 52, raises soybeans and white corn on a 40-acre plot his family has owned for 100 years. He exports about one-third of his soybean crop to China, so if the Chinese shun American suppliers, he risks losing $170,000 in annual income.
"We're all about trade with China. We spent the last 25 years building that trade relationship," said Steinkamp. "I appreciate the president looking out for our entire country. We just don't want soybeans to be the fall guy and take all the punches from the Chinese."
Information for this article was contributed by Paul Wiseman of The Associated Press and by Andrew Mayeda of Bloomberg News.
A Section on 04/04/2018