“U.S. President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday,” David Lawder and Michael Martina report for Reuters. “A third source who had direct knowledge of the administration’s thinking said the tariffs, associated with a ‘Section 301’ intellectual property investigation, under the 1974 U.S. Trade Act begun in August last year, could come ‘in the very near future.'”
“While the tariffs would be chiefly targeted at information technology, consumer electronics and telecoms, they could be much broader and the list could eventually run to 100 products, this person said,” Lawder and Martina report. “Trump is targeting Chinese high technology companies to punish China for its investment policies that effectively force U.S. companies to give up their technology secrets in exchange for being allowed to operate in the country, as well as for other IP practices Washington considers unfair.”
“China runs a $375 billion trade surplus with the United States and when President Xi Jinping’s top economic adviser visited Washington recently, the administration pressed him to come up with a way of reducing that number,” Lawder and Martina report. “U.S. business groups, while uneasy about triggering Chinese retaliation, have increasingly pressed Washington to take action on Beijing’s industrial policies, such as market access restrictions and the ‘Made in China 2025’ plan, which aims to supplant foreign technologies with domestic ones.”
“Shortly after Trump took office,” Lawder and Martina report, “the Information Technology & Innovation Foundation (ITIF), a U.S. technology think tank whose board includes representatives from top companies such as Apple, Amazon, Cisco, Google, and Intel, called for coordinated international pressure on Beijing.”
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MacDailyNews Note: In the fifth edition its “Worst Innovation Mercantilists” report, ITIF documents the world’s most egregious examples of innovation mercantilist policies that were proposed, drafted, or implemented in 2017. The report finds China among the year’s worst offenders. This is the fifth consecutive year China has earned a place on the list, a dubious distinction that it alone has achieved.
When countries impose protectionist policies in high-value, high-tech sectors, they damage the entire global innovation system. The United States must lead by taking action against them. The Trump administration has taken steps in the right direction by increasing pressure against China. But in the absence of a concerted effort by an international coalition, innovation mercantilism will put the broader global trading system at systemic risk. — ITIF Trade Policy Analyst Nigel Cory
Read ITIF’s “The Worst Innovation Mercantilist Policies of 2017” report in full here.
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