President Donald Trump has approved tariffs on Chinese goods worth about $50 billion, said a person familiar with the decision, ratcheting up a confrontation on trade that's set to prompt retaliation from Beijing.
The Trump administration is preparing to release a refined list of Chinese products to be hit with tariffs that homes in on technologies where China wants to establish itself as a leader, according to five people familiar with the matter. In April, the U.S. revealed an initial list targeting about 1,300 products worth $50 billion in Chinese imports.
The U.S. is scheduled today to release an updated list of Chinese tariff targets. The White House has said the duties will be implemented "shortly" after the release of today's list, though no date has been set.
Trump said this week that he will confront China "very strongly" over trade in the coming weeks. "China could be a little bit upset about trade because we are very strongly clamping down on trade," the president said Wednesday in a Fox News interview.
The administration has said it wants to aim its tariffs at industries identified in China's 2025 plan. "Made in China 2025" identified 10 industries that the world's second-biggest economy wants to become globally competitive and globally dominant in during this century. In April, the U.S. revealed an initial list targeting about 1,300 products worth $50 billion in Chinese imports.
Administration officials have signaled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans. China has targeted $50 billion in U.S. products for potential retaliation.
Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump's watch and undermine the benefits of the tax cuts he signed into law last year.
"If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown," Gary Cohn, Trump's former top economic adviser, said at an event sponsored by The Washington Post.
By moving ahead with tariffs against China, the Trump administration would undermine efforts by the world's two biggest economies to avoid a trade war that the International Monetary Fund has warned could undermine global growth. The president has been threatening tariffs against China since U.S. officials concluded that Beijing abuses American intellectual-property rights.
The two countries have been negotiating on trade issues, but President Xi Jinping's government has indicated it will drop any commitments made in recent talks if Trump follows through on his tariff threat.
Trump is shaking up the world economic order with tariffs to secure benefits for the U.S. He threw a summit of the Group of Seven wealthy economies into turmoil by revoking support for the group's joint statement and berating the summit's host, Canadian Prime Minister Justin Trudeau.
So far, the U.S. has imposed tariffs on steel and aluminum imports. Economists expect the direct impact on the U.S. economy to be modest. But if the president follows through on all the duties he has threatened, including the tariffs against China, U.S. inflation could accelerate by 15 basis points, according to Goldman Sachs.
Trump's tariffs also may influence his peace efforts on the Korean Peninsula. Beijing is an important player in talks with North Korea on abandoning its nuclear-weapons program.
The president has been under pressure from U.S. lawmakers over his decision to soften a penalty on Chinese telecom-equipment-maker ZTE Corp. In April, the U.S. banned ZTE from buying American technology for seven years, effectively putting the company out of business. But Trump said this month that ZTE could avoid the ban if it paid at least $1 billion in penalties, among other things.
Republican senators pushing to keep stiff sanctions on ZTE have dug in for a potential showdown with the White House as some of their colleagues said they'd try to negotiate a way out with Trump.
Sens. Tom Cotton, R-Ark., and Chris Van Hollen, D-Md., said Thursday that there was no plan in the Senate to alter their amendment to a defense authorization bill to restore restrictions on ZTE that were lifted by Trump. The annual defense policy bill may be voted on by the Senate in the coming days.
The wrangling over ZTE, China's second-largest maker of telecom equipment, is a rare instance of Republicans joining with Democrats to defy Trump, whose trade policies have created friction within the party. While many GOP lawmakers have been critical of his imposition of tariffs on allies such as Canada and the European Union, they have stifled attempts to curtail Trump's authority. But cracking down on the Chinese company accused of violating sanctions against Iran and North Korea has drawn broad support, with members citing national security concerns.
The Senate sided with the Trump administration Thursday to vote down a GOP plan that would have given Congress greater oversight over deals between foreign and U.S. firms that could affect national security.
The legislation, pushed by Sen. Patrick Toomey, R-Pa., failed to clear a procedural hurdle when the Senate blocked it with a 35-62 vote. Sixty "yes" votes would have been required for the measure to advance.
The Toomey legislation involved the Committee on Foreign Investment in the United States, or CFIUS, an interagency committee chaired by the treasury secretary that conducts national security reviews of attempted takeovers of U.S. firms by foreign companies. Toomey wanted to give Congress a vote on major committee decisions.
"It's a simple question of whether we think that we ought to be accountable, that we ought to take authority for the legislative authority we delegate," Toomey argued ahead of the vote. "A 'no' vote is really a vote to shirk our own responsibility."
But talking points circulated by the Trump administration to Senate offices argued that Toomey's legislation "could potentially result in CFIUS being unable to establish regulations, thereby undermining national security."
Democrats also opposed Toomey's move, noting that it derived from a long-standing drive by conservatives to rein in the rule-making authority of the executive branch on various fronts, long-predating the Trump administration and ranging well beyond the Committee on Foreign Investment in the United States.
The underlying defense bill itself includes language to expand the purview of the committee, so that its jurisdiction goes beyond deals where a U.S. firm would be acquired by a foreign one. Under the proposed Senate changes, the committee would also be able to review other types of transactions where a foreigner is trying to acquire a stake in a U.S. company.
That change, supported on a bipartisan basis, reflects senators' concerns about China's spreading influence and attempts to obtain access to U.S. technology and businesses.
Sen. Sherrod Brown, D-Ohio, who supported the provisions expanding the jurisdiction of the Committee on Foreign Investment in the United States, said Toomey's legislation could end up having the opposite effect by making it harder for U.S. regulators to stop potentially dangerous deals.
"China is aggressively trying to steal American technologies and put our national security at risk," Brown said. "Why on earth would we make it harder for our watchdogs to stop them?"
Information for this article was contributed by Andrew Mayeda, Justin Sink, Jenny Leonard, Erik Wasson Margaret Talev and Steven T. Dennis of Bloomberg News; by Ken Thomas and Paul Wiseman of The Associated Press; and by Erica Werner of The Washington Post.
A Section on 06/15/2018