By on May 7, 2019

The United States could impose a 25 percent import tariff on $200 billion worth of Chinese goods by the end of this week — the result of threats issued by President Donald Trump following a reported about-face on the part of Chinese officials negotiating a new trade deal with the U.S.

At the core of the dispute? Intellectual property rights, sources claim.

According to Bloomberg, sources with knowledge of the dispute say U.S. Trade Representative Robert Lighthizer grew angry after Chinese officials said they would not accept a trade deal that required new changes to Chinese law. This is apparently the opposite of their previous stance.

From Bloomberg:

The change has major implications for provisions of the deal aimed at ending a Chinese practice of forcing U.S. companies seeking to do business in the country to reveal proprietary technologies and other intellectual property.

The U.S. side, led by Trade Representative Robert Lighthizer, thought that issues around what’s known as forced technology transfer were resolved and considered the Chinese position on changing its laws to be an attempt to renegotiate, the people said. Lighthizer was angered by the move and briefed Trump.

While the ongoing Chinese sales slump is cutting into automaker profits, most OEMs still see the country as a barely-tapped market capable of lifting their fortunes during a similar slump in the West. Still, handing over sensitive technology to Chinese partners puts OEMs at risk of losing their competitive advantage, should that technology leak out to rivals. There’s a reason why the U.S. wants China to change its laws.

“Over the course of the last week or so we have seen … an erosion in commitments by China,” Lighthizer told media, as reported by Reuters. “That in our view is unacceptable.”

“We’re not breaking off talks at this point. But for now … come Friday there will be tariffs in place,” he added.

The outlet reports that Chinese Vice Premier Liu He is still expected to travel to Washington on Thursday and Friday for talks. Treasury Secretary Steven Mnuchin backed up Lighthizer’s comments, claiming Chinese officials reneged on a deal the two sides expected to close as early as this week.

“They were trying to go back on language that had been previously negotiated, very clear language, that had the potential of changing the deal dramatically,” Mnuchin said. “The entire economic team … are completely unified and recommended to the president to move forward with tariffs if we are not able to conclude a deal by the end of the week.”

The U.S. first raised import tariffs (from 10 to 25 percent) on Chinese goods last July, hitting certain automakers harder than others. Some domestic OEMs applied for exemptions for vehicles and components (sorry, Tesla), while others switched production locales to avoid steep sticker prices in the vital U.S. market.

[Image: Ford China]

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50 Comments on “Trade War Watch: New Tariffs Coming Down the Pipe After China Pulls U-turn...”


  • avatar
    thelaine

    Go Trump. It’s about frkin time.

  • avatar
    turbo_awd

    Probably just me, but I thought the idiom was “coming down the pike”?

  • avatar
    JimZ

    “According to Bloomberg, sources with knowledge of the dispute say U.S. Trade Representative Robert Lighthizer grew angry after Chinese officials said they would not accept a trade deal that required new changes to Chinese law. This is apparently the opposite of their previous stance.”

    somehow I’m not surprised. unfortunately they’re equipped to slog out a protracted trade dispute, so hopefully this doesn’t end up screwing us in the near-term.

    • 0 avatar
      bullnuke

      If this goes on for an extended period, we in the US will probably be able to see which items we consume on a regular basis are imported from China. WalMart will be a good indicator when they begin re-pricing 90% of their stock…

      • 0 avatar
        hreardon

        A lot of manufacturing will be shifted to other developing Asian countries – it’s already started. I have clients with manufacturing in China that have already begun the process of relocating to Vietnam, Philippines, and India in anticipation of a drawn out conflict.

        I think that part of what Trump is doing is both signalling, and stalling, to provide time for importers to shift production/sourcing.

        Now, if Trump were smart (quit laughing, everyone), he’d be pushing to get this manufacturing moved to Latin America. Most of what is being made in China ain’t coming back to the US, but could reasonably be built within our hemisphere. This would have the effect of starving China of our financial, industrial and intellectual capital, as well as helping to keep those south of our borders in their home states.

        • 0 avatar
          FreedMike

          Exactly – if we were to help Latin American countries develop themselves economically, maybe we wouldn’t have so many migrant workers trying to come here illegally.

          (Gasp…mind blown, right? But the problem is that the single-issue anti-immigration cranks are a force at the ballot box, and if the problem were to be solved, that wouldn’t be the case anymore.)

          But you’re making too much sense about an issue that people would rather scream and yell about.

          • 0 avatar
            TrailerTrash

            excuse me, who who exactly is against immigration?
            or perhaps you as a left leaning speaker kinda confuses illegal vs legal.
            kinda like the way the left has gone to combining anti man caused climate change to just all around climate change denying…a neat trick but can be done as long as goofs follow right along.

          • 0 avatar
            highdesertcat

            Careful TT, there’s a #DoubleStandard here for writing anything that the left finds objectionable.

          • 0 avatar
            SoCalMikester

            more $2/hr jobs in mexico is only going to help the companies that make stuff.

          • 0 avatar
            highdesertcat

            SoCalMikester, it also helps other areas in Mexico where no companies make stuff, like resort areas, fishing villages, resident-alien compounds where foreigners live year-’round. Like Ensenada, and up and down the Baja coast.

            No welfare, unemployment or beggars there. Too much money can be made off the “furners.”

          • 0 avatar
            whynotaztec

            There certainly are single issue anti illegal immigration folks out there, along with the abolish ICE and open border types on the other side. Maybe if the 80% of us in the middle could somehow tune out the left and right fringes we might make some progress.

          • 0 avatar
            Lorenzo

            @SoCalMikester – the minimum wage in Mexico is 102.68 pesos a DAY. At 18.98 pesos to the dollar, that’s $5.41 per day. A $2/hr job is a huge raise in Mexico, and 25 million Mexicans make only the minimum wage.

        • 0 avatar
          Mnemic

          ” This would have the effect of starving China of our financial, industrial and intellectual capital, as well as helping to keep those south of our borders in their home states.”

          Lol this is what NAFTA was supposed to do and we all know how that worked out.

          • 0 avatar
            hreardon

            Mnemic –

            It could be argued that NAFTA did a good job of supplying jobs to a lot of people who otherwise *would* have come north – but, I get your meta-point.

            The difference with China is that we are forced to transfer technology and we are ostensibly building up an adversary whose political, social, and cultural norms are in many ways opposed to ours. I’m all for anything that deprives them of the capital to advance their geopolitical goals.

          • 0 avatar
            SSJeep

            NAFTA did make Southern Mexico significantly more economically stable. Most of the migrants today come from Guatemala, Honduras, and Northern Mexico.

            Yes, shifting production from China to Mexico should be a priority for American companies and lawmakers.

          • 0 avatar
            JimZ

            NAFTA alone couldn’t offset the damage our War on (some) Drugs has caused.

      • 0 avatar
        xtoyota

        Dollar Store will have to change its name to Dollar Thirty-Five Stores :=)

        • 0 avatar
          Lorenzo

          They won’t change the name of the store – they already advertise “$1 and up”. A corporate name change is expensive, but changing the advertising is much cheaper.

  • avatar
    thelaine

    There will be pain in the US, but this is long overdue. Now would be a great time for other countries that are also getting screwed by China to jump in. Not holding my breath. They are, as usual, hiding behind us. Once we get a deal, they will demand what we got.

  • avatar
    vvk

    NPR keeps doing interviews of people “hurt” by the tariffs and not mentioning why the trade war is necessary in the first place. The Chinese have been ripping us off for decades with impunity. It is very well known in the tech industry.

    Is NPR a tool of the Chinese government?

    • 0 avatar
      thelaine

      No, they are a taxpayer-subsidized echo chamber of the left.

    • 0 avatar
      don1967

      Are you surprised that the mainstream media would take the anti-Trump position regardless of how illogical it is, or how hypocritical it makes them?

      These “news” organizations are nothing but dopamine dealers for those suffering from Trump Derangement Syndrome.

      Imagine the cognitive pretzels they will twist themselves into if Donald Trump wins a Nobel Prize for brokering a peace deal in Korea.

      • 0 avatar
        thelaine

        The Chinese are used to having their way, and used to dealing with an America that isn’t willing to make short term sacrifices to deny them their way. Trump has decided to reverse this pattern.

        It was never going to be easy, and Trump deserves great credit for undertaking this course and for sticking to it.

        • 0 avatar
          jkross22

          thelaine,

          The Chinese were typically negotiating with presidents who represented the wants of large US based corporations with much to gain by doing business in China. Trump’s business interests appear elsewhere, as does his corruption.

          The reason Trump isn’t getting credit yet is a) the job’s not done and b) Trump is his own worst enemy. His constant tweeting/lying/nonsense undoes much of the work he should get credit for doing.

          • 0 avatar
            highdesertcat

            It’s amazing how Trump has managed to focus the attention of the Chinese, and just about everyone else around the planet.

            I love it!

        • 0 avatar
          thelaine

          Trump’s communication style and methods have allowed him to assert some control over messaging vs. an overwhelmingly hostile media. People who don’t like Trump also don’t like his tweets. Without his communication methods, he would never have been elected. If he stopped tweeting, most of the people who complain about his tweets would still vote against him. You either like him or you don’t. The rest is rationalization.

          • 0 avatar
            highdesertcat

            I didn’t vote for Trump in 2016, but I sure as hell WILL vote for him IF he runs again in 2020.

            He’s won me over with his policies re the economy, merit-based immigration, import/export trade agreements, balancing the Bench, and Fed intervention.

          • 0 avatar
            thelaine

            Same here, HDC, and for the same reasons, and more.

            Also, someone has to clean up the dirty, dirty deeds the were done in the justice dept. and intel agencies during and after the election. If they are allowed to repeat this, we can kiss our republic goodbye. If DJT hadn’t been elected, we never would have known about any of it.

      • 0 avatar
        1500cc

        “Imagine the cognitive pretzels they will twist themselves into if Donald Trump wins a Nobel Prize for brokering a peace deal in Korea.”

        If Obama can win the Nobel Peace prize just a few months into his presidency for doing virtually nothing other than maintaining the status quo, then one could argue that anything is possible.

        • 0 avatar
          highdesertcat

          Naw, there’s too much hate out there for Trump. He’ll never get credit for anything great he does.

          If people were helped by Trump’s policies, they’ll vote to keep him in office. If not, they’ll vote for someone else.

          I cannot imagine anyone wanting to go back to the disastrous policies of the last guy.

          Well, maybe the welfare crowd and the free loaders would. But maybe most of them are working these days.

      • 0 avatar
        JD-Shifty

        Fox News, nectar of morons

      • 0 avatar
        Lorenzo

        The press has always been biased politically, but they used to hide it so well. If a favored politician screwed up, they’d cover it for a day, but tomorrow is another news cycle.

        If an unfavored politician accidentally stepped on his dog’s paw, there would be coverage for days, including a roundtable discussion of pet abuse in America and spokespersons from the SPCA.

        Now they don’t even cover scandals by their favored politicians, and blow up everything the unfavored politicians do, even turning feel-good stories into lectures on the evils of so-and-so. If you want to know who goes too far, just check the satire sites for which outlets and their stories get the “treatment”.

        Oh, BTW – Trump will never get a Nobel prize. The Nobel Committee is on the other side. Obama got the Peace Price before he did anything, though they at least waited until he was inaugurated.

    • 0 avatar
      tylanner

      “Is NPR a tool of the Chinese government?”

      Trolling is not allowed on TTAC.

  • avatar
    FreedMike

    Trade warz iz kool and eazy to win.

    • 0 avatar
      Fordson

      Let’s see the box score so far…the tariffs so far have had the effect of dropping China’s currency value, which has had the effect of making it cost the same in dollars to buy the goods AND pay the tariff – so nobody stopped buying anything, and now the trade deficit with China is higher than ever.

      These people have a gift for this stuff…and “gift” is the word for it.

      • 0 avatar
        highdesertcat

        Some of America’s trading partners levy a VAT on American-made goods. I would like to see America do the same to the goods we import from those countries, and use the same rationale they use.

        • 0 avatar
          Manic

          Well, the countries with VAT levy that on everything, not just to the US made goods, locally made goods too, approx. 20% tax here in Europe, depending on country, often less for basic foodstuffs. Everyone is used to it. Exported goods are sold without VAT.
          Kinda similar to US sales tax. Not really sure what that would mean in the US, tax coffers full of money and very angry consumers at least in the beginning.

          • 0 avatar
            highdesertcat

            I would not be opposed to a national VAT on everything sold in the US, foreign or domestic made. And drop all the niy-noy local taxes.

            But the opponents argue that such a VAT would hit the disadvantaged harder.

            I believe a national VAT would be cheaper than the barrage of local taxes that hit us now, along with property taxes, luxury taxes, crap taxes on sewer systems, etc etc etc.

            But mainly, I am a proponent of taxing imported goods at the same rate that our trading partners tax the goods America exports.

    • 0 avatar
      Lorenzo

      Not necessarily. China is a special case in that their economy depends on exports to us and ours has virtually no need for exports to China. The exports China sends us is mostly low-priced junk that can be produced elsewhere for slightly higher prices, and cutting off China’s ability to steal American tech (intellectual property) without paying for it benefits American tech developers and our economy.

      In most other cases, Trump is threatening trade to get better deals than the ones existing, but still have trade. In the case of China, the Chinese are leveraging trade to become a hegemon in Asia and eventually the world, both economically and militarily.

      The trade war is driving production to other asian countries that are wary of Chinese intentions. The Chinese couldn’t have been more ham-fisted in their attempt at world power: see their activity in the South China Sea.

  • avatar
    tylanner

    Trump is certainly good at fighting for the big guy. That will be his legacy…but thankfully it’s reversible.


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