Friday, 1 June 2018

US Announces Timeline For 25% Tariff on Chinese Tech Products

After significant back-and-forth over the past few months, the White House After significant back-and-forth over the past few months, the White House intends to follow through with a pledge to place tariffs on imported Chinese technology goods while also tightening restrictions on investments by Chinese firms into American companies.

In a statement posted by the White House this morning, the administration said that it would impose a 25 percent tariff on $50 billion of Chinese high-tech goods “containing industrially significant technology.” That follows the conclusion of the U.S. Trade Representative’s Section 301 investigation into China’s industrial and intellectual property policies. What goods will be included in the tariff policy has been up for debate, but the final list will be released on June 15th. This package of tariffs is different than a separate package of tariffs focused on steel and aluminum production announced earlier this year.

The regulations around investment restrictions by Chinese companies will be announced at the end of June. The administration will also continue to litigate a case at the World Trade Organization over intellectual property protections.

All of these announcements should be taken with a shaker’s worth of salt though, since these are just the latest cards being played in a series of interconnected negotiations both internal to the White House and external with the Chinese government.

Internally, the White House has been riven with differences over how aggressively to prosecute the Chinese over its industry practices, with financiers like Treasury Secretary Steven Mnuchin taking a more flexible line while others like U.S. Trade Representative Robert Lighthizer and Director of the White House National Trade Council Peter Navarro have pushed for a much more aggressive approach. As different actors curry favor with President Donald Trump, their respective policies seem to appear and disappear.

[Posted at the SpookyWeather blog, June 1st, 2018.]

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