CHINA-US: TRADE WAR

The Wall Street Journal reported on August 1, that to ratchet up pressure on Beijing the US is considering more than doubling its proposed tariffs on $200 billion of Chinese goods to 25%. In a White House meeting on July 31, US President Trump dismissed a proposed 10% China tariff as weak and had officials bump up the levy to 25%. A final decision could come around September.  The US Congress has also been increasing the pressure on China and on August 1, the US Senate passed a defense-policy bill to tighten U.S. national-security reviews of Chinese deals under the interagency Committee on Foreign Investment in the U.S., as well as to revamp export controls governing which U.S. technologies can be sent abroad. The President is expected to sign it into law in the next few days. One provision of the bill requires an annual report on China to include information on efforts by the Chinese government to influence U.S. media and cultural institutions. The bill also limits Chinese funding of language programs at U.S. universities, restricts Chinese involvement in joint military exercises and calls for bolstering U.S. ties with India and Taiwan.

(Comment: U.S. officials are confident that they have the upper hand in the trade fight with China because the U.S. economy is gathering strength while the Chinese economy shows signs of weakening and is more dependent on trade than the U.S.  The White House says its trade battle with China has a twofold purpose: to reduce the $376 billion U.S. trade deficit with China by $200 billion and force China to change its industrial policies, including those that pressure U.S. companies to transfer technology to Chinese businesses.)






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