U.S. Levies Tariff on $50 Billion in Chinese Tech Goods

TOPSHOT - A man looks at his phone near a giant image of the Chinese national flag on the side of a building in Beijing, during the ongoing 19th Communist Party Congress on October 23, 2017. / AFP PHOTO / GREG BAKER (Photo credit should read GREG BAKER/AFP/Getty Images)
GREG BAKER/AFP/Getty Images
Washington, DC

The Trump administration announced on Tuesday that it would levy $50 billion of tariffs on certain Chinese tech imports, implement investment restrictions, and enhance export controls on Chinese tech on the basis of national security.

The Tuesday announcement is the result of President Donald Trump’s March 22 executive order initiated to “protect domestic technology and intellectual property from certain discriminatory and burdensome trade practices by China.” The order followed a report from the U.S. Trade Representative’s office regarding Chinese trade practices and stealing of U.S. intellectual property.

Trump has been updated on the progress of the investigation that determined the following, according to the White House:

1. To protect our national security, the United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The proposed investment restrictions and enhanced export controls will be announced by June 30, 2018, and they will be implemented shortly thereafter.

2. The United States will continue to pursue litigation at the World Trade Organization for violations of the Agreement on Trade-Related Aspects of Intellectual Property Rights based on China’s discriminatory practices for licensing intellectual property. The United States filed the case regarding these violations on March 23, 2018.

3. Under Section 301 of the Trade Act of 1974, the United States will impose a 25 percent tariff on $50 billion of goods imported from China containing industrially significant technology, including those related to the “Made in China 2025” program. The final list of covered imports will be announced by June 15, 2018, and tariffs will be imposed on those imports shortly thereafter.

After the Office of the U.S. Trade Representative released a list of 1,300 product categories for potential tariffs of $50 billion on Chinese goods, China retaliated with a threat of an equal $50 billion in tariffs on U.S. exports to China. Trump shot back with a threat of up to $150 billion in tariffs on Chinese imports to the U.S.

While Trump expressed appreciation when Chinese President Xi Jinping seemed to respond with relenting on tariff threats, the White House made clear that it required “concrete actions” from China before relenting in U.S. moves toward tariffs. China has made similar promises to act better on trade with the U.S. in the past.

“The United States will continue efforts to protect domestic technology and intellectual property, stop noneconomic transfers of industrially significant technology and intellectual property to China, and enhance access to the Chinese market,” according to Tuesday’s release. The U.S. is also asking China to “remove all of its many trade barriers, including non-monetary trade barriers, which make it both difficult and unfair to do business there.”

The White House emphasized the president’s repeated emphasis on “reciprocal” trade treatment.

Top Trump administration trade officials continue to negotiate with China on bilateral trade issues. A U.S. trade delegation will return to China to work out tentative agreements from past talks in Beijing and Washington, DC, to reduce the U.S. trade deficit with China.

Follow Michelle Moons on Twitter @MichelleDiana.

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