Multiyear trade war with China

New Trump tariffs raise fear of ‘multiyear’ trade war with China

By DOUG PALMER

Business leaders and some Republicans pressed President Donald Trump on Wednesday to meet with Chinese President Xi Jinping to resolve a growing trade dispute after Trump's administration took steps to slap new tariffs on $200 billion worth of Chinese goods.

Although the new duties would not take effect until the end of August at the earliest, Trump's latest move would drastically escalate the trade war by hitting thousands of products affecting consumers and businesses.

"Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution," House Ways and Means Chairman Kevin Brady (R-Texas) said late Tuesday. "I strongly urge President Trump and President Xi to meet soon face-to-face to craft a solution to establish fair and lasting trade between our two countries.”

Trump and Xi will have the opportunity to discuss issues in November at two gatherings. One is the Asia-Pacific Economic Cooperation forum in Papua New Guinea and the other is the Group of 20 nations summit meeting in Argentina. But Brady called on the two leaders to set an earlier date for a meeting.

U.S. business groups also urged the administration to begin talks before the effects of the tariffs can damage U.S. economic growth and undo the positive benefits of tax reform and moves by the administration to reduce red tape.

"The last thing America’s manufacturing workers need is an escalating trade war,"said Jay Timmons, president and CEO of the National Association of Manufacturers, in a statement, calling on the two countries to work “toward a fair, bilateral, enforceable, rules-based trade agreement to end China’s market-distorting activities.“

For his part, Trump showed no sign of reconciling with China. In tweets from Brussels, where he was meeting with NATO allies, the president blamed other nations’ policies for hurting U.S. agriculture, despite the fact that farm exports have grown in recent years.

“Farmers have done poorly for 15 years. Other countries’ trade barriers and tariffs have been destroying their businesses,” Trump wrote. “I am fighting for a level playing field for our farmers, and will win!“

Last week, the U.S. said it would impose a 25 percent tariff on $50 billion worth of Chinese goods in two stages — $34 billion that went into force last week and another $16 billion that could go into force as early as August.

The promise to add tariffs on $200 billion in goods was a direct response to China's decision last week to match Trump's tariffs by retaliating with a 25 percent on $34 billion worth of American agricultural and other exports.

The administration took the first step in that direction Tuesday by publishing a proposed list of goods, which could be hit with the duties after a public comment period ends Aug. 30.

Beijing's Commerce Ministry called the new U.S. tariff list "totally unacceptable," and vowed to respond with counter-measures and an additional WTO lawsuit — the third it has brought against the United States this year.

"The Chinese side is shocked by the actions of the U.S.," a spokesperson said, according to an informal translation. "The behavior of the U.S. is hurting China, hurting the world and hurting itself. This irrational behavior is unpopular."

"In order to safeguard the core interests of the country and the fundamental interests of the people, the Chinese government will, as always, have to make the necessary counter-measures," the spokesperson continued.

China imported only $130 billion worth of goods from the United States, while the U.S. imported $505 billion worth from China in 2017. But Beijing could back with other measures to make life difficult for American companies doing business in China.

Other business groups that called for de-escalation of tensions include the American Chemistry Council, whose members include Dow, DuPont, 3M, Honeywell, Exxon Mobil and Chevron. They noted Trump has also alienated many key allies by imposing tariffs on their steel and aluminum exports to protect U.S. national security.

"Unilateral actions that alienate long-standing U.S. allies and close off the U.S. market to the rest of the world are not a recipe for economic growth and prosperity and are very unlikely to change China’s unfair practices," the ACC said. "We strongly urge the Administration to create a strong, multilateral coalition to bring an end to this unnecessary trade war.”