Trump unveils $60bn worth of tariffs on China amid fears of trade war

The trade action is 'the first of many', Mr Trump says

Donald Trump has unveiled a plan to impose up to $60bn in new tariffs on Chinese goods, as well as limiting the country's investment in the US as payback for what his administration alleges is years of intellectual property theft.

The president’s order - which earlier reports had suggested would be nearer $50bn - is likely to trigger retaliation by Beijing and could further stoke fears of a global trade war.

Just before signing the trade action, Mr Trump said it was “the first of many” as he looks to correct what has repeatedly called "unfair" trade deals with nations around the world.

Under the terms of the memorandum Mr Trump signed, he will target the Chinese imports only after a consultation period, thereby giving industry lobbyists and members of Congress a chance to water down a list of proposed 1,300 products that could be targeted.

The consultation period will also give China time to respond, reducing the risk of immediate revenge from Beijing. The Chinese government has vowed to take “all necessary measures” to defend the country’s interests if Mr Trump attacks it for allegedly stealing American technology or pressuring US companies to hand it over.

“China will not sit idly to see its legitimate rights damaged and must take all necessary measures to resolutely defend its legitimate rights,” the Commerce Ministry in Beijing said in a statement on its website.

Mr Trump struck a conciliatory tone when he first began speaking at the White House’s signing ceremony, calling China “a friend” and saying he had “tremendous respect” for Chinese President Xi Jinping.

“We have spoken to China and we are in the middle of negotiations,” Mr Trump said, adding that loss of American jobs from unfair trade was one of the main reasons he had been elected as President.

He again lamented over “unfair” trade deals and the US’s trade deficits with other countries, saying he had asked China to immediately reduce its trade surplus with America by $100bn.

The US runs a $375bn goods trade deficit with China, although Mr Trump claims it is $504bn.

Economic experts have asserted that using trade deficits or surpluses to measure US commercial relations with any single country, as Mr Trump does, ignores the complexities of trade in today’s global economy. What matters is the totality of trade, the experts argue.

The president’s action was made under Section 301 of the 1974 Trade Act, which gives Mr Trump broad authority to respond to a foreign country’s unfair trade practices. An investigation identified theft from and coercion of US companies to disclose their intellectual property as well as purchases by Chinese state funds of American companies for their technology knowledge.

Ahead of the trade announcement, White House officials said the administration was looking at tariffs on $50bn worth of Chinese goods, a figure based on a calculation of the impact on the profits of US companies that had been forced to hand over their intellectual property as the price of doing business in China.

There was no explanation of the difference between the numbers provided by White House officials in the briefing and Trump’s $60bn.

“Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from U.S. companies ... establishing its own competitive advantage in an unfair manner,” Everett Eissenstat, deputy director of the National Economic Council, told reporters.

During his remarks, the President also slammed the World Trade Organization, saying it has been a disaster for the US and arbitration has been very unfair.

Mr Trump’s announcement came two weeks after he imposed sweeping new tariffs on steel and aluminium imports, trade penalties also aimed at China for flooding the world with cheap metals. Since his announcement of those tariffs, allies have been willing to renegotiate trade barriers, the President said.

The EU, Australia, Argentina, Brazil and South Korea are among the nations that will get an initial exemption from the looming steel and aluminium tariffs, said US Trade Representative Robert Lighthizer.

There are countries involved in various stages of trade talks with the US, and Mr Trump decided “to pause the imposition of tariffs with respect to those countries,” Mr Lighthizer told the Senate Finance Committee. Canada and Mexico will also be initially exempt from the tariffs that will go into effect on Friday.