The order came after Trump last week rejected as inadequate a proposal from U.S. Trade Representative Robert Lighthizer to levy import taxes on $30 billion in Chinese imports, the people said. Putting a value on the intellectual property that Chinese individuals have reportedly siphoned from USA companies has been particularly vexing.
In an interview with Reuters in January, Trump suggested that he was considering a big fine as part of an investigation into China's alleged intellectual property theft.
"We are working this from the product side and the country side". As expected, the president is imposing, as from 23 March 2018, an additional 25% duty on steel, and an additional 10% duty on aluminum, imported from all countries except Canada and Mexico. The administration has not yet said that it will focus the tariffs in this way; but, given that they are being introduced with a phase-in period, during which trade partners may seek exemptions, such targeting seems to be the likeliest scenario.
The newly ascendant Navarro emerged triumphant last week when former top economic aid Gary Cohn resigned following a bruising internal battle over whether to impose the steel and aluminium tariffs.
The debate over possible tariffs on China comes as the relationship between the world's two largest economies is fraying.
The US trade deficit with China reached a record US$276 billion (HK$2.16 trillion) a year ago, putting more pressure on Trump, who campaigned for president in 2016 on a promise that he would address the trade imbalance. We have seen these trade battles back and forth in the past as well.
In imposing those tariffs, Trump offered temporary exemptions for Canada and Mexico - two of the largest exporters of steel and aluminum to the USA - and said that other US allies could negotiate exemptions.
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The US attempt to unleash a trade war on China creates a risky precedent which could undermine the very principle of free trade, Huang Weiping, professor at the People's University of China, warns.
"First, the government will push for discussion with the USA over tariff cuts or exemptions on South Korean steel articles soon", he said. "However, the situation, when trade between two countries is guided by the principle of mutual sanctions instead of free trade, it creates a risky precedent". In my view, U.S. negotiators will use the threat of imposing the tariffs on Chinese producers as a way to persuade China's government to abandon the policy of "voluntary" technology transfers.
President Trump was elected on a nationalist platform that includes standing up for the United States.
Volume on USA exchanges was 6.53 billion shares, compared to the 7.14 billion average over the last 20 trading days.