Trump delays announcement of trade action against China

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In the latest delay of a White House trade move, a planned Friday announcement of President Donald Trump’s trade action against China has been postponed, two people familiar with the matter said.

Sources previously told POLITICO Trump was slated to hold an event at the White House on Friday in which he would direct U.S. Trade Representative Robert Lighthizer to open an investigation under Section 301 of the Trade Act of 1974 over what the administration views as Chinese violations of U.S. intellectual property rights and forced technology transfer.

The sources did not give an explanation for why the announcement was postponed, nor did they provide a date for when it would be rescheduled. A White House spokeswoman did not immediately comment.

The move would immediately ramp up tensions between Washington and Beijing — and could lead to steep tariffs on Chinese goods. Trump has expressed frustration in recent months over what he sees as China’s unfair trade policies, and he’s come up empty in his efforts to pressure Beijing to use its leverage over North Korea — as its main trading partner — to get Pyongyang to rein in its nuclear missile program.

Although Trump is still expected to instruct Lighthizer to carry out the investigation as early as next week, his administration has been marked by several delays on the trade front.

Two Commerce Department reports examining whether to restrict steel and aluminum imports on national security grounds were expected by the end of June but have been bottled up in an internal review. Trading partners raised threats of retaliation and domestic steel users complained of being hurt by price increases and restricted supply.

There also has been no sign of a third pending report, examining the causes of significant bilateral trade deficits, which was also due by the end of June.

Democrats, who are eager to prove to voters that they are tougher on trade than the tough-talking Trump, have accused the president of being all mouth and no action.

“There is a real cost to all the overhyped rhetoric, when the follow-through isn’t there,” Ron Wyden, the top Democrat on the Senate Finance Committee, said Thursday.

One result of the White House’s delayed action has been a spike in steel imports over the last few months by foreign suppliers looking to avoid tariff increases that could result if Trump follows through on his threatened action.

“This episode demonstrates how tough talk without a real strategy hurts American workers,” Wyden said.

Any so-called Section 301 action by the administration against China would produce a lengthy investigation that could extend into all aspects of Chinese industrial policies. Unilateral U.S. trade sanctions could be the ultimate result.

Section 301 allows the U.S. to take unilateral action against countries that impose barriers to U.S. exports. That could take the form of increased import duties, but that would likely violate WTO rules. So the administration could look for some other form of retaliation, like restricting Chinese investment in the United States.

U.S. companies have complained they are often forced to share valuable technology with Chinese counterparts as a condition of doing business in the country.

By ANDREW RESTUCCIA, TARA PALMERI and DOUG PALMER
Politico

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