The Trump administration will impose about $60 billion in new trade penalties on China, the first targeted trade measures aimed directly at Chinese “economic aggression.”
“We have a tremendous intellectual property theft situation going on,” President Donald Trump said Thursday, revealing that he has spoken with Chinese leadership about this issue and the “out of control” trade deficit. As these problems have yet to be resolved, the U.S. is preparing to take punitive action against China to the tune of tens of billions of dollars.
“This is just a fraction of what we’re talking about,” the president added, announcing that he has asked China to take steps to reduce the trade deficit by $100 billion or more. Trump said the U.S. is having “very large negotiations” with China on trade.
U.S Trade Representative Robert Lighthizer launched an important investigation of China under Section 301 of the Trade Act of 1974 last August looking “into Chinese laws, policies, and practices which may be harming American intellectual property rights, innovation, or technology development.”
“We are losing to China,” Lighthizer told lawmakers Wednesday. “We have a very serious problem of losing our intellectual property.” Secretary of Commerce Wilbur Ross estimates that intellectual property theft and forced technology transfers cost the U.S. several hundred billion dollars annually, and China is generally considered to be the most serious offender.
“The era of American economic surrender is over,” Vice President Mike Pence said Thursday. In addition to tariffs, the U.S. is reportedly also planning to block certain Chinese investments.
White House Trade Adviser Peter Navarro stressed Thursday that dialogue with China has failed to produce desirable results. “The problem is with the Chinese, talk is not cheap, it’s very expensive,” he argued. The White House argues that every one billion dollars of the $375 billion costs the U.S. 6,000 jobs.
Beijing has already signaled that it may retaliate against punitive U.S. trade measures.
China “has expressed its position on many occasions that we resolutely oppose this type of unilateral and protectionist action by the U.S. China will not sit idly by while legitimate rights and interests are hurt. We must take all necessary measures to firmly defend our rights and interests,” the Chinese Ministry of Commerce said Thursday.
“China will have a choice of how to respond. They have benefited far more from this relationship than we have and they will take that into account,” a White House official revealed. China is believed to be preparing its own penalties in response.
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