The US government has threatened to impose tariffs on $50bn of imports from China unless Beijing addresses the issue of the theft of American intellectual property, once again raising the prospect of a trade war.
The renewed threat of tariffs comes ahead of commerce secretary Wilbur Ross’s visit to Beijing this week when he will try to get China’s agreement to firm numbers for additional US exports to the country. The US had wanted China’s trade surplus with America to shrink by $200bn in two years, a figure seen as fanciful by most economists and trade experts.
Washington will also press ahead with restrictions on investment by Chinese companies in the US as well as export controls for goods exported to China, the statement from the White House said.
Details of the final tariff list of $50bn of imports to the US will be published by 15 June, with investment and export controls to be announced by 30 June.
The announcement on Tuesday restated comments by administration officials to the effect that both the tariffs and the restrictions remained in place even after the US and China sketched out a deal this month to reduce China’s $375bn trade surplus with America.
A list of potential tariff targets has already been published by the United States trade representative, which mainly includes intermediate goods used by companies to make other products as well as some consumer goods such as televisions.
Even though Washington had not withdrawn the threatened tariffs on imports from China, Beijing reacted harshly to the announcement, saying it was surprised by Tuesday’s statement and would defend its interests.
Threats of a trade war between the US and China had hit financial markets hard, although now most economists believe the two will manage to avoid a major economic conflict.
China has repeatedly said that it will push ahead with its development of high-tech industries and will not back down in the face of what it sees as threats from Washington.
The two countries earlier this month agreed to look at measures to reduce China’s trade surplus with the US in a move that appeared to reduce the risk of a trade war between the world’s two largest economies.
That deal was separate from the US investigation into China’s alleged theft of intellectual property.
There is room to increase exports to China by selling more agricultural commodities and energy products, and China has agreed in principle to import more, but the two sides do not have a firm agreement. Economists estimate that US exports could rise by up to $90bn over a period of years.
