US President Donald Trump announced USD 50 billion of tariffs on China to punish the country for its "unfair" trade practices, a move that could escalate the already tense trade relations between the world's two biggest economies.
Trump directed the US trade representative to level tariffs on about USD 50 billion worth of Chinese imports after a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations.
Trump instructed US Trade Representative to publish a proposed list of products and any tariff increases within 15 days and to pursue dispute settlement in the World Trade Organization (WTO) to address China's discriminatory technology licensing practices. He also has directed the Treasury Secretary to address concerns about investment in the US directed or facilitated by China in industries or technologies deemed important to the country. "This has been long in the making," Trump told reporters in the White House at the ceremony to sign his memorandums targeting China's economic actions. He said America's trade deficit with China was a whopping USD 504 billion per annum.
"According to some estimates it is USD 375 billion. But anyway you look at it, it is the largest deficit of any country in the history of our world. It's out of control," he said. Trump said his Section 301 trade action could be about USD 60 billion. "But that's really just a fraction of what we're talking about," he said, adding that he has asked China to reduce the trade deficit immediately by USD 100 billion. "It's a lot. That would be anywhere from 25 per cent, depending on the way you figure, to maybe something even more than that. But we have to do that," he said.
Reiterating his use of word "reciprocal", Trump said it was not good when they charge 25 per cent for a car to go in, and the US charges two per cent for their car to come into the US. "That's how China rebuilt itself. The tremendous money that we've paid since the founding of the World Trade Organization, which has actually been a disaster for us. It's been very unfair to us. The arbitrations are very unfair. The judging has been very unfair. And knowingly, we always have a minority, and it's not fair," he said.
Trump alleged that China had been indulging in tremendous intellectual property theft worth hundreds of billions of dollars on a yearly basis. "I've spoken to the president. I've spoken to representatives of China. We've been dealing with it very seriously," he said. "As you know, we're renegotiating NAFTA. We'll see how that turns out. Many countries are calling to negotiate better trade deals, because they don't want to have to pay the steel and aluminum tariffs, and we are negotiating with various countries," he added.