Fanning the flames of what has already become an intense trade war, President Donald Trump reportedly has plans to curb Chinese investments in American technology, possibly put an additional 20 percent tariff on all EU-made cars and hit back indefinitely at any nation that doesn’t back down on imposed retaliations.
Refusing to let up on China, Trump is reportedly considering a move that would inhibit companies with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology,” The Wall Street Journal reported, citing sources close to the matter. In conjunction with that, the plans may also include preventing such U.S. technologies from being exported to China.
More on those plans is expected by the end of this week, but if Trump does decide to move forward, it will further incense China, which is already on edge over the president’s initial $50 billion in tariffs on Chinese goods and his allusion to $200 billion more — a threat that came in response to China’s reciprocal retaliatory tariff measures.
Trump said last week that China’s refusal to back down would be met with action on the $200 billion in additional tariffs, and since China has responded, calling the move “blackmail” and saying it would also be willing to strike back again as needed, more tariffs will likely make their way into the conversation on trade.
China isn’t the only nation sending clear signals — and new tariffs — to the U.S. indicating an intent to stand its ground. Mexico and Canada have put in place retaliatory tariffs against the U.S., and the EU has done the same.
On Wednesday of last week, the European Commission outlined 2.8 billion euros ($3.25 billion) in tariffs on U.S. products, including jeans, T-shirts and leather shoes, which it said would take effect Friday, meaning duties can be collected on those products bound for the EU now.
In response, Trump tweeted Friday, “Based on the Tariffs and Trade Barriers long placed on the U.S. & its great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them there!”
Reiterating his position on all countries’ trade retaliations, Trump threatened on Twitter Sunday, “The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!”
Meanwhile, the EU and China are cozying up to each other even more as the U.S. continues to upset relations with each.
On Monday, both parties met in Beijing to discuss “support for the multilateral trading system, trade and investment,” a European Commission statement noted. Ahead of an upcoming EU-China Summit on trade and the economy, the EU and China agreed to come to the table with market access offers that address “liberalization and protection.”
Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.