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As Threats Of Additional Tariffs Continue, China Says U.S. Demands Are Unreasonable

Apr 4, 2018
Originally published on April 5, 2018 11:50 am
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The trade dispute between the U.S. and China has escalated. China issued another list of U.S. exports it plans to hit with tariffs. On that list, cars, aircraft and soybeans. The action was a response to another Trump administration list - 1,300 Chinese products it plans to sanction, including flat-screen TVs and medical devices. NPR's John Ydstie has more on the intensifying fight between the world's two largest economies.

JOHN YDSTIE, BYLINE: This latest action from both sides centers around a U.S. allegation that China is stealing intellectual property and coercing U.S. companies doing business in China to share their valuable technology. Wendy Cutler, who spent three decades in the U.S. Trade Representative's office and was a top negotiator, says it's a legitimate grievance.

WENDY CUTLER: When you think of these practices and you put them in the context of this China 2025 policy, where China has publicly said that they want to have global dominant companies in 10 advanced technology sectors, this is a pretty serious threat that needs to be addressed.

YDSTIE: Some of the items targeted by the U.S., like electric cars and industrial robotics, are areas where China seeks dominance. But Cutler, who's now at the Asia Society Policy Institute, is skeptical imposing tariffs and threatening a trade war is the best way to proceed.

She says tariffs would be a violation of the World Trade Organization rules, which the U.S. wants the world to follow. She argues a better approach would be to restrict Chinese investment in the U.S.

CUTLER: Which would mirror Chinese restrictions against U.S. investment in China. Those types of restrictions are not covered by the WTO for the most part, so I would opt, if we wanted to take an action, to look at the investment angle.

YDSTIE: And Cutler says the Trump administration is already laying the groundwork for that. Two weeks ago, Treasury Secretary Mnuchin was tasked by President Trump to produce a plan within 60 days aimed at restricting Chinese investment in the U.S.

This morning, stock markets tumbled as fear of an economically damaging trade war mounted, but stocks recovered and actually ended the day sharply higher after the new head of the White House National Economic Council, Larry Kudlow, suggested on Fox Business that the proposed tariffs on $50 billion worth of Chinese products might never take effect.

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LARRY KUDLOW: These are just the first proposals, OK? In the United States, at least, we're putting it out for comment. It's going to take a couple of months. I doubt if there would be any concrete actions for several months. We'll see how that plays out. Nothing concrete has actually happened.

YDSTIE: Section 301 - the part of the U.S. trade law under which the Trump administration is taking this action - calls for a comment period after the announcement of tariffs. Once the comment period is concluded, the administration has six months to actually impose the tariffs, says Wendy Cutler.

CUTLER: I'm hoping that this time period can be used by both sides to get to the table and see if they can find a path forward together to resolve their differences.

YDSTIE: Many in the U.S. business community are hoping for the same thing. The National Association of Manufacturers, the Chamber of Commerce and the National Retail Federation have voiced opposition to the Trump administration's tariff strategy. And the American Soybean Association called on the Trump administration to reconsider its use of tariffs in this fight. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.