As part of a major shift in U.S. trade policy, President Donald Trump has ramped up tariffs on Chinese goods, aiming to revive domestic manufacturing and correct decades of imbalanced trade between the two economies.
China’s economic growth has accelerated dramatically since the country joined the World Trade Organization in 2001. However, the Chinese Communist Party’s trade-distorting practices, such as intellectual property theft, massive state subsidies, currency manipulation, wage suppression, and labor rights violations, have led to the closure of many U.S. manufacturers and the loss of millions of U.S. jobs.
Trump has complained about the problem for decades. Now there is a bipartisan view in Washington on the need to address China’s market practices.
The president unveiled the contours of his global tariff plans on Wednesday, including a 34 percent reciprocal levy on Beijing. The president noted China’s currency manipulation and other non-monetary trade barriers.
The action raised the total new tariffs on China to 54 percent, including the 20 percent levies previously imposed to pressure Beijing into reducing the flow of fentanyl into the United States.
The levy covers approximately $600 billion in annual trade, affecting nearly all Chinese goods and fulfilling a promise Trump made on the campaign trail.
The president said that the United States holds leverage over other nations, including China, due to its status as the world’s largest and wealthiest consumer market.
“Foreign nations will finally be asked to pay for the privilege of access to our market, the biggest market in the world,” Trump said during his speech on Wednesday.
China quickly hit back, announcing that, starting April 10, it would impose 34 percent tariffs on imports of all U.S. goods as part of a broader set of retaliatory actions, including tightening export controls on various rare earth elements and adding U.S. companies to the government’s “unreliable entities list.”
In response, Trump said the Chinese regime “played it wrong.”
“They panicked—the one thing they cannot afford to do,” the president said. (More)