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Trump Administration Preparing For More Tariffs On China

May 29, 2018
Originally published on May 29, 2018 6:23 pm
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MARY LOUISE KELLY, HOST:

The Trump administration fired another warning shot today in its trade fight with China. The White House says it is getting ready to impose high tariffs on tens of billions of dollars' worth of Chinese imports. It is also weighing new limits on Chinese investment in the U.S. Now, tough talk about China is nothing new for President Trump. But this latest offensive comes in what had been a period of relative calm.

NPR's White House correspondent Scott Horsley is here. Hey, Scott.

SCOTT HORSLEY, BYLINE: Good to be with you, Mary Louise.

KELLY: Good to have you here with us. So what's your take on this? Is this mixed signals, or what's going on?

HORSLEY: It certainly seems that way. And it's not entirely clear what's behind it. The White House appears to be ramping up the pressure on China over what the U.S. sees as unfair trading practices - in particular China forcing U.S. tech companies to share their technology or in some cases stealing that technology outright. Just last week, Treasury Secretary Steve Mnuchin had told Fox News the U.S. and China had called a temporary truce.

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STEVE MNUCHIN: We're putting the trade war on hold. So right now we are - we have agreed to put the tariffs on hold. And the president had a very productive meeting with the vice premier and the Oval Office, with all of us and the vice president. He heard these commitments himself. And he can always decide to put the tariffs back on if China doesn't go through with their commitments.

HORSLEY: So that's what appears to be happening now, but it's not clear what China's done to provoke this. And, Mary Louise, it's a sensitive time because, you know, the president's counting on China's help in dealing with North Korea and its nuclear program.

KELLY: Yeah, absolutely. Absolutely. Well, did they give any sort of timeline on when these new tariffs might take effect?

HORSLEY: Well, they don't take effect right away, if they ever do. So that's why this is a warning shot. The White House is planning to release a list of Chinese products that would be subject to the tariff in a couple of weeks, and the details of the investment restrictions are due out at the end of June. So there is a window here for the two sides to reach an agreement. And the commerce secretary, Wilbur Ross, was already on his way to Beijing for some trade talks this weekend. It's possible these tariff threats are just designed as sort of a negotiating tactic to soften up China for that discussion. But I spoke with Chad Bown at the Peterson Institute for International Economics. He says if that's the case, it could backfire.

CHAD BOWN: The big concern is how the Chinese government now interprets this. They again continue to ramp up their threats of retaliation against U.S. exports, which included, you know, soybeans and aircraft and automobiles, the very things that it seemed like they had gone in the other direction of as of last week, that they were going to buy more of.

HORSLEY: And indeed, China's Commerce Ministry said today it was caught off guard by this toughly worded White House statement. They're looking to kind of go back to the truce terms.

KELLY: Well, catch us up briefly on other fronts in the administration's trade campaign, China being just one of this broader trade war.

HORSLEY: Yeah. Remember; back in March, the president ordered tariffs on steel and aluminum imports from around the world. Most of the big suppliers got a temporary reprieve from those tariffs, including Canada, Mexico and the European Union. But that reprieve ends this Friday. So unless there's a deal before then, those tariffs could go into effect. And then if that weren't enough, the administration's also threatened to impose a 25 percent tariff on imported cars and car parts. So Bown says there's a lot going on.

BOWN: This just seems to be the way President Trump likes to conduct trade policy, to just kind of create chaos. But it's hard to identify a strategy that's ultimately coming out of this.

HORSLEY: And one danger here, Mary Louise, is that the tariffs on steel and aluminum can alienate the countries that Trump would like to have at his side in doing battle with China.

KELLY: All righty. Thank you, Scott.

HORSLEY: You're welcome.

KELLY: That is NPR's Scott Horsley. Transcript provided by NPR, Copyright NPR.