US to unveil tariff list this week, targeting tech goods

US Trade Representative Robert Lighthizer has said that preserving America's technological edge is "the future of the US economy".
US Trade Representative Robert Lighthizer has said that preserving America's technological edge is "the future of the US economy".PHOTO: BLOOMBERG

WASHINGTON • The Trump administration will unveil this week the list of Chinese imports targeted for US tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world's two largest economies.

The list of US$50 billion to US$60 billion (S$65 billion to S$78 billion) worth of annual imports is expected to target "largely high-technology" products and it may be more than two months before tariffs take effect, administration officials have said.

The US Trade Representative's (USTR) office needs to unveil the list of products by Friday under President Donald Trump's China tariff proclamation signed on March 22.

The tariffs are aimed at forcing changes to Chinese government policies that USTR says result in the "uneconomic" transfer of US intellectual property to Chinese companies.

The agency's "Section 301" investigation authorising the tariffs alleges that China has systematically sought to misappropriate US intellectual property through joint venture requirements, unfair technology licensing rules, purchases of US technology firms with state funding and outright theft.

China denies that its laws require technology transfers and has threatened to retaliate against any US tariffs with sanctions of its own, with potential targets such as US soya beans, aircraft and heavy equipment.

On Sunday, Beijing slapped extra tariffs of up to 25 per cent on 128 American products including frozen pork, as well as wine and certain fruit and nuts, in response to steep US tariffs on aluminium and steel imports announced by the Trump administration last month.

 

Fears have arisen that the two countries will enter a trade war that will crush global growth.

US technology industry officials said they expect the Trump administration's list to target products that benefit from Beijing's "Made in China 2025" programme, which aims to upgrade the country's domestic manufacturing base with more advanced products.

The state-led programme targets 10 industries for replacing imports with Chinese-made products: advanced information technology, robotics, aircraft, shipbuilding and marine engineering, advanced rail equipment, new energy vehicles, electrical generation equipment, agricultural machinery, pharmaceuticals and advanced materials.

"Foreign technology acquisition through various means remains a prime focus under 'Made in China 2025' because China is still catching up in many of the areas prioritised for development," USTR said in its report justifying the tariffs.

US Trade Representative Robert Lighthizer has said that preserving America's technological edge is "the future of the US economy".

Reports that the tariff list may include consumer goods such as clothing and footwear drew strong protests from US business groups, which argue that it would raise prices for US consumers.

While there have been contacts between senior members of the Trump administration and their Chinese counterparts since Mr Trump announced his intention to impose tariffs, there has been little evidence of intensive negotiations to forestall them.

"The administration is following the Japan model from the 1980s," said a tech industry executive.

"It'll publish a Federal Register notice of tariffs on certain products, then try to reach a negotiated settlement over the next 60 days."

REUTERS

 
A version of this article appeared in the print edition of The Straits Times on April 03, 2018, with the headline 'US to unveil tariff list this week, targeting tech goods'. Print Edition | Subscribe