WASHINGTON • President Donald Trump is preparing to impose a package of US$60 billion (S$79 billion) in annual tariffs against Chinese products, following through on a long-time threat that he says will punish China for intellectual property theft and create more American jobs.
The tariff package, which Mr Trump plans to unveil by Friday, was confirmed by four senior administration officials.
Senior aides had presented Mr Trump with a US$30 billion tariff package that would apply to a range of products, but Mr Trump directed them to roughly double the scope of the new trade levies.
The package could be applied to over 100 products, which Mr Trump argues were developed by using trade secrets the Chinese stole from American companies or forced them to hand over, in exchange for access to its market.
If implemented, the tariff package would be the broadest set of punitive economic actions imposed by a modern United States president against China and could draw retaliation, fraying the trade partnership between two of the world's largest economies.
Most US businesses agree with the Trump administration's criticisms of China, but many disagree with its strategy.
"The US-China Business Council believes that tariffs will do more harm than good in bringing about an improvement in intellectual property protection for American companies in China," said council president John Frisbie.
The equivalent of US$375.2 billion, the United States' trade deficit with China last year.
"Business wants to see solutions to the issues, not just sanctions."
Last year, China was the largest US trading partner in goods, not counting services.
The US exported US$130.4 billion of goods to China, but it imported nearly four times as much, running a trade deficit of US$375.2 billion, according to the US Census Bureau.
Economists said it would be difficult for the Trump administration to target Chinese companies because products imported from China are made by multinational companies with supply chains that stretch across the globe.
"So much of what we import from China is produced by multinational companies," said economist Nicholas Lardy. "Thirty per cent are consumer electronics. I'm sure the President doesn't want to raise the prices of those and send Apple's stock into the toilet."
It will be easier for China to hit back, Dr Lardy said, as China can zero in on US exports like soya beans - one of the top two goods the US exports to China, along with aircraft and aircraft parts.
He said: "We'll just start buying things from the next lowest-cost supplier, such as Bangladesh or Vietnam. It's not that the US$30 billion will magically be produced in the United States the day after they announce these tariffs."
Voicing hopes that Beijing and Washington could avoid a trade war, Chinese Premier Li Keqiang told the close of the annual Parliament session yesterday that China would open its economy further, so that foreign and Chinese firms can compete on an equal footing.