Business

White House Outlines Hundreds of Chinese Products Subject to Tariffs

Posted April 3, 2018 8:10 p.m. EDT

WASHINGTON — The Trump administration said Tuesday that it will place a 25 percent tariff on electronic touch screens, iron and steel plates, medical devices, aircraft parts, batteries and other Chinese products, outlining more than 1,000 imported goods that will soon face tariffs as part of a sweeping trade measure aimed at penalizing China for its trade practices.

The move, which stems from a White House investigation into China’s use of pressure, intimidation and theft to obtain U.S. technologies, is likely to inflame an already-simmering trade war between the countries. On Monday, China said it would slap tariffs on 128 American products in response to a separate White House plan to tax steel and aluminum imports from China and other countries.

The products targeted by the White House are part of its plan to go after China’s dominance in cutting-edge technologies like semiconductors, electric vehicles and advanced medical products — industries that China is pursuing dominance in as part of an industrial plan known as “Made in China 2025.”

The Trump administration said that trade analysts from multiple government agencies had identified products that benefit from these policies but had refined the list to remove goods that were likely to cause disruptions to the U.S. economy or consumers, or be subject to legal constraints. The list of products concentrated heavily on machinery and high-tech components, and largely excluded the kind of Chinese-made finished consumer products available for sale at Target or Walmart. The United States is levying tariffs on a total of $50 billion worth of Chinese products each year.

The list’s publication will be followed by a notice and comment period in which U.S. companies can advise the Trump administration on the product choices. Companies will need to submit written comments by May 11, and a public hearing on the submissions on will be held May 15 in Washington.

While many U.S. companies say they are unfairly treated in China, they have rued the possibility of a trade war between the world’s two largest economies, and the economic harm it could cause, and have begun pushing back against the White House’s plans. China remains a key and growing market for companies like John Deere and Apple, as well as for soybean farmers and growers of other agricultural products.

Financial markets fell sharply on Monday as China imposed its own retaliatory tariffs on American products but regained most of their lost territory on Tuesday.

President Donald Trump, who has repeatedly promised tough action on China’s trade practices, said Tuesday that he intended to get along with China but that its unfair trade behavior had gone on too long. “It’s not something we can live with,” Trump said at the White House, adding, “I campaigned on that.”

Trump advisers have criticized past administrations for allowing China to receive the benefits of global trade while continuing to break the international trade rules imposed by organizations like the World Trade Organization — a charge China denies.

But the administration has struggled to persuade its critics that the kind of tough trade measures Trump favors can alter China’s behavior without tipping the world into a trade war and ultimately harming American workers and consumers. In addition to the tariffs, the White House is preparing to restrict Chinese investment in U.S. technology and innovation.

“The administration is rightly focused on restoring equity and fairness in our trade relationship with China,” said Myron Brilliant, an executive vice president and the head of international affairs at the U.S. Chamber of Commerce. “However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends.”

Scott Kennedy, a China expert at the Center for Strategic and International Studies, said the Trump administration’s approach is drastically different from those of past administrations, which tried to reach agreement on trade practices with the Chinese through coordinated dialogues.

The Trump White House, in contrast, is trying to totally reset the relationship through aggression, Kennedy said. “They see this as a game of chicken.”

The Coalition for a Prosperous America, an organization that has supported the president’s trade agenda, called the China action a shift from “naive” to “strategic” trade. “The age of appeasement must end,” said Paola Masman, the group’s media director.

But the administration’s trade measures are prompting concern among many American companies, who are wary of Beijing’s response. Chinese officials have already promised to erect trade barriers in response to the United States’ moves.

“We will certainly take countermeasures of the same proportion and of the same scale, same intensity,” Cui Tiankai, the Chinese ambassador to the United States, said in an interview posted Monday on the Chinese news site CGTN America. He added that China had been strengthening its protection of intellectual property and was prepared to review any cases in accordance with its laws.

It remains to be seen what additional levies China might add in response to new U.S. tariffs.

Analysts said the Chinese government had designed its tariffs to hurt regions of the United States that supported Trump — a bid to encourage the president’s supporters to put pressure on him to change his policies. In an analysis, Mark Muro, a senior fellow at the Brookings Institution, found that tariffs on products like fruit, nuts, pork and steel pipes would fall disproportionately on counties that supported Trump.

Farming communities, one of the country’s largest exporters and a solid base for Trump, are among the most vulnerable. Chinese tariffs of 25 percent will particularly hurt U.S. pork farmers, who sent more than $1 billion worth of products to China last year. Sen. Joni Ernst, R-Iowa, said American farmers were already struggling to make ends meet. “Increasing tariffs on exports will harm Iowa producers and undermine the rural economy,” Ernst said. “It’s my hope that we can pursue policies that enhance our competitiveness, rather than reduce our access to foreign markets.”

The announcement came as the president ramped up threats about withdrawing from the North American Free Trade Agreement and sending troops to the southwestern border to combat unauthorized immigrants traveling through Mexico.

While White House advisers have been pushing for a timely conclusion to the ongoing talks over NAFTA, Trump continues to threaten to withdraw from the pact. On Tuesday, he called it a “horrible, horrible, embarrassing deal for the United States.”