U.S. imposing 25% tariff of Chinese goods, apply investment restrictions in June

Sergio Conner
May 29, 2018

The White House said Tuesday the tax will affect goods worth $50 billion and include products related to the Made in China 2025 program, a 2015 initiative promoting the country's information technology, robotics, aerospace, marine, rail, auto, power, agriculture and bio-medical industries.

Based on the recommendations of the US Trade Representative's office, Trump will announce "proposed investment restrictions and enhanced export controls" aimed at China by June 30, according to a White House announcement Tuesday.

"For many years, China has pursued industrial policies and unfair trade practices ... that champion Chinese firms and make it impossible for many United States firms to compete on a level playing field", the White House said in a statement. Those requests in particular have provoked a backlash from China, which has threatened its own potential set of tariffs on $50 billion in American goods. The full list of imports that will be covered will be announced by June 15.

According to the White House, to protect its national security, the U.S. will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology.

Those earlier rounds of talks led to a joint statement released by the White House on May 19, touting "a consensus" reached on "taking effective measures to substantially reduce" the trade imbalance.

China pressed the U.S.to give ZTE a break after the Commerce Department cut off the company from US suppliers to punish it for allegedly lying to American officials in a sanctions case.

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Trump has long bemoaned the massive trade deficit with China.

"For instance the United States charges a 2.5 percent tariff on Chinese cars, while China now maintains a 25 percent tariff on cars from the United States", the White House said.

If the two sides fail to reach an agreement and the United States moves forward with tariffs, Chinese officials have said they plan to retaliate with tariffs of their own on USA exports such as soybeans.

In a statement Tuesday, a spokesperson for the Chinese Ministry of Commerce took a subtle dig at Trump's constant back-and-forth on trade issues.

The trade spat between the top two economies of the world began last month with Trump imposing tariffs on steel and aluminum imports into US.

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