Donald Trump has decided to impose tariffs on about $50bn in imports from China in a move due to be announced on Friday that will bring the world’s two largest economies closer to a trade war. The final decision, which the Trump administration claims is justified by Beijing’s longstanding theft of US companies’ intellectual property, came at a gathering of the president’s top White House trade advisers on Thursday, according to people briefed on the meeting’s outcome. It sets the stage for a major escalation of trade hostilities between the two countries.
It also follows Mr Trump’s decisions in recent weeks to begin levying tariffs on steel and aluminium imports from Canada, the EU and Japan, provoking a rift with G7 allies. “The Trump administration is now poised to open another front in its rapidly expanding global trade war,” said Eswar Prasad, a Cornell University economist and China expert. The US is due to release on Friday a new list of products from China to be targeted with a 25 per cent duty to be imposed in several tranches. An initial list of 1,300 product categories was released earlier this year, ranging from pharmaceuticals to flat screen televisions.
Many of the companies and other interested groups providing feedback pleaded with the Trump administration not to impose the duties. The new list will be similar to the original but more focused on Chinese exports linked to Beijing’s “Made in China 2025” plan to lead the world in 10 key sectors including robotics, according to people briefed on the White House discussions. The tariffs are due to be implemented in stages to allow public comment on new product categories being added.
They are expected to be followed this month by new investment restrictions as well as new limits on US exports of “industrially significant” products. Chinese domestic markets fell on Friday following the latest news on US tariffs with the Shanghai Composite ending the day down 0.7 at a 20-month low while the Shenzhen Composite shed 1.8 per cent to the lowest since February.