Trump administration eyes tariffs on $50 billion in Chinese goods

U.S. President Donald Trump will sign a presidential memorandum on Thursday to potentially slap tariffs on $50 billion in Chinese imports over forced transfer of intellectual property, a senior White House official said.

The move risks retaliation by Beijing and a damaging trade war between the world`s two largest economies.

Trump will sign the memorandum at 12:30 p.m. EDT (1630 GMT) at the White House, kickstarting a consultation period by the U.S. Trade Representative`s to identify a list of Chinese products that could be hit by increased tariffs, Everett Eissenstat, deputy director of the National Economic Council, told reporters.

"Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from U.S. companies ... establishing its own competitive advantage in an unfair manner," Eissenstat added.

In addition, Trump will also direct the U.S. Treasury to propose measures that could restrict Chinese investments in the United States, Eissenstat said.

The United States will also pursue litigation in the World Trade Organization to address China`s discriminatory licensing practices, he added.

The tariffs and investment restrictions will be imposed under the U.S. Trade Representative`s "Section 301" investigation into alleged misappropriation of U.S. intellectual property by China.

Eissenstat said the investigation clearly demonstrates unfair practices by China, which forces U.S. investors to turn over key technologies to Chinese firms.

U.S. stocks pared losses after the scale of Washington`s potential action against China became known but were still trading sharply lower, with the S&P 500 index down 1.3 percent.WTO COMMITMENTS

Reuters reported last week that the Trump administration was considering punitive tariffs on up to $60 billion worth of Chinese information technology, telecoms and consumer products, including some non-tech items such as footwear and apparel as part of the probe.

The administration also has demanded that China shrink its annual trade surplus with the United States by $100 billion. China ran a record $375 billion goods trade surplus in 2017.

Trump, who vowed during his 2016 election campaign to protect U.S. workers from unfair competition, had repeatedly threatened to impose sweeping tariffs on Chinese goods of up to 45 percent. But many trade experts believe unilateral U.S. tariffs on China would break U.S. commitments to the WTO.

The tariffs will almost certainly prompt China to retaliate by imposing its own tariffs on certain U.S. goods, or by shunning purchases of U.S. soybeans and other grains or such items as Boeing aircraft and Caterpillar construction equipment.

The threat of anti-China tariffs, particularly on consumer electronics and apparel, has alarmed U.S. industry groups, which have warned it would raise living costs for American families and choke off growth. U.S. Chamber of Commerce President Thomas Donohue said such action would wipe out many of the gains many Americans would see from the Trump tax cuts that went into effect this year.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

TAGS:

Economy