Now, after three rounds of U.S. tariffs against Chinese imports -- and a fourth looming early next year -- Beijing, at last, appears to be paying attention. Internally, voices within the Chinese Communist Party are calling for a negotiated settlement, albeit one that allows Chinese President Xi Jinping to save face.
U.S.-China trade tensions are poised to come to a head this week when President Trump meets with Chinese President Xi Jinping, and a major component of those talks will likely focus on intellectual property (IP) theft. Federal officials have repeatedly accused Chinese hackers of stealing trade secrets, saying those actions are the underlying reason for billions of dollars worth of tariffs on imports from China.
The Trump administration has received backing from Congress in taking a harder line over protecting critical U.S. technology from foreign threats. In August, President Donald Trump signed a law to strengthen a panel that reviews investments from abroad for national security risks, which was widely viewed as a way to curtail Chinese investment in the U.S.
China will lower import tariffs and continue to broaden market access, President Xi Jinping said on Monday at the opening of a week-long trade expo seen as an attempt by Beijing to counter mounting criticism of its trade and business practices. Xi also promised to accelerate opening of the education, telecommunications and cultural sectors, while protecting foreign companies' interests and enhancing punitive enforcement for infractions of intellectual property rights.
China’s state-sponsored push to dominate technologies of the future is one of the biggest stumbling blocks to prospects for resolution to the U.S. trade war. Officials from both sides are pessimistic about chances for a breakthrough when Donald Trump and Xi Jinping meet on the sidelines of the Group of 20 summit in Buenos Aires on Nov. 30-Dec. 1.
Trade tensions have taken another negative turn, with the U.S. demanding that China come up with a specific plan to stop allegedly stealing technology. Until Beijing does so, the U.S. will not resume trade negotiations, according to a report Thursday in The Wall Street Journal.
Connected and autonomous vehicles rely on IT hardware and software, an area where the United States has a competitive advantage globally. Congress and the administration should help U.S. industry press that advantage not with auto tariffs, but with more robust innovation policies.
U.S. tariffs on around $200 billion in Chinese imports are set to jump to 25% on Jan. 1, up from the 10% implemented last month. That works out to around $30 billion in new taxes to be paid by U.S. importers, many of whom will pass at least some of the costs on to U.S. consumers.
President Trump on Monday hailed the major revisions he was able to extract from Canada and Mexico to the 25-year-old North American trade agreement, as business executives, labor leaders, and lawmakers began poring over details. Speaking at a Rose Garden news conference, Trump called the pact that would replace the North American Free Trade Agreement “the most important trade deal we’ve ever made by far.”
U.S. tariffs that hit some $200 billion worth of Chinese products on Monday spare many high-profile consumer technology items such as “smart” watches and speakers, but the less flashy home modems, routers and internet gateways that make them work weren’t so lucky.