LEAKED: Trump’s Next Shoe to Drop on US-China Trade

This is the big one. It makes steel and aluminum tariffs look like a game.

By Wolf Richter of WOLF STREET

If this is true – it was leaked by a “source familiar with international trade” to the Nikkei Asian Review and isn’t based on a White House announcement – then it’s going to add a lot of fuel to the already heated trade dispute between the US and China, and may ultimately make the steel and aluminum tariffs look like a game.

To punish China for its intellectual property theft, including IP infringements such as counterfeiting, and to retaliate against Chinese investment rules that require technology transfers to Chinese partners in order to set up shop in China, the Trump administration is considering a proposal by the Office of the US Trade Representative (USTR) that would impose:

  • Tariffs on a large variety of Chinese products, including tech products and consumer goods like clothing.
  • Restrictions on investment by Chinese companies in the US, the first impact of which we have already seen by Trump’s order yesterday blocking all Chinese takeovers of large US tech companies.
  • And limits on visas for certain Chinese nationals.

The USTR also urged US allies, including Japan, to implement similar measures and synchronize their policies, according to the “source familiar with international trade,” cited by the Nikkei Asian Review.

Germany, Japan, and other countries have long fumed over the required technology transfers to Chinese partners. At the same time, Chinese companies, often state-owned, have been on a shopping spree in Germany, going after robotics know-how and other industries, which has caused a lot of soul-searching in the business community in Germany. Japan too “has long opposed China’s intellectual property practices,” as the Nikkei put it. Now the USTR has asked these countries to do something about it

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