Trump Raises Stakes in China Trade war

President Trump raised the stakes in his trade war with China on Monday, ordering the government to prepare tariffs on an additional $200 billion worth of Chinese exports in addition to the products already facing import duties.

A statement by U.S. Trade Representative Robert Lighthizer blamed the new round of tariffs on China’s decision to match the earlier $50 billion in U.S. Trade tariffs with its own $50 billion in duties on U.S. Imports to China.

“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs if 10 percent on an additional $200 billion of Chinese imports,” Lighthizer said in a statement. He published a list of 600 items that they are proposing to tax and said the public will have a chance to comment on the Chinese exports until the end of August.

Trump’s hardline trade policy has already provoked concern from U.S. farmers, who fear that China will abruptly halt imports of their products, particularly soybeans and corn. A suggestion from Trump that he might impose 25 percent tariffs on imported cars caused an uproar in Europe, home of Mercedes-Benz and Volkswagen, and even provoked General Motors to warn against taking the step because it could lead to job losses in the United States.

That fear seemed to have materialized when BMW, which while German-owned is the largest car exporter from the United States, said it was shifting production of some of its SUVs from Spartanburg, South Carolina to China.

BMW said that because China had imposed a 25 percent tariff on cars imported from the United States in this trade war, it signed a deal with China’s Brilliance Automotive Group Holdings to produce up to 520,000 SUV models at two Chinese factories. SUVs sold in China by BMW had been produced in the U.S. before the trade spat.

China has vowed to match the U.S. tariffs, and Trump has promised to raise the total amount of goods being taxed to $450 billion. Because China exports far more to the U.S. than the other way around, the belief is that China will be hurt more than the U.S. economy and will eventually fold. But that could be politically difficult for Xi Jinping.

Trumps tariffs are aimed at forcing China to change its industrial policy of forcing U.S. Firms to partner with Chinese companies and share their intellectual property with them.

“USTR has found that China has been engaging in industrial policy which has resulted in the transfer and theft of intellectual property and technology to the detriment of our economy and the future of our workers and businesses,” Lighthizer said.

US President Donald Trump (R) and US First Lady Melania Trump disembark from Air Force One as they arrive at Melsbroek Air Base in Haachtsesteenweg on July 10, 2018. – US President Donald Trump has arrived in Brussels on the eve of a tense NATO summit where he is set to clash with allies over defence spending. Trump arrived on Air Force One at Melsbroek military airport, shortly after saying on Twitter that NATO allies should ‘reimburse’ the United States for spending on the alliance. (Photo by BENOIT DOPPAGNE / BELGA / AFP) / Belgium OUT (Photo credit should read BENOIT DOPPAGNE/AFP/Getty Images)

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