U.S. President Donald Trump is scheduled to sign a memorandum Thursday "targeting China's economic aggression" in a move that could escalate into a full-scale trade war between the world's two largest economies.
The U.S. trade actions come partly in response to the theft and improper transfer of American technology to Chinese companies.
The Chinese commerce ministry said ahead of the meeting that China opposes unilateral U.S. trade actions and hopes the two countries can find a mutually beneficial solution through dialogue.
U.S. officials spoke to reporters Wednesday about their monthslong investigation under Section 301 of the Trade Act of 1974 of Beijing’s trade practices.
China has long been considered by many in the international community to have contravened fundamental principles of global trade, despite joining the World Trade Organization in 2001.
There have been a “number of specific failings by China to live up to its WTO obligations,” said an official of the U.S. Trade Representative in a Wednesday background briefing for reporters.
The briefing and other comments not for attribution by officials are seen as clear signals the administration, in response to an Aug. 14 memo by Trump, intends to use the Section 301 trade tool.
The last time it was wielded was by the Clinton administration against Japan to pry open that country’s automotive sector.
China has been “ripping off” the United States, Trump has emphasized numerous times in public remarks during which he has harshly criticized his predecessors for not doing anything about it.
According to published reports, Trump is expected to impose tariffs, valued at tens of billions of dollars, on a number of Chinese products. Sources say that in addition to tariffs, restrictions on Chinese investment in the United States are likely as a response to Beijing using state funds and enterprises under the government’s control to purchase intellectual property here.
Trump in January hit the Chinese-dominated solar panel and cell industry with tariffs. Earlier this month, he launched global tariffs on steel and aluminum (from which Canada and Mexico were quickly given indefinite exemptions), a move China’s commerce ministry said it “strongly opposed.”
U.S. Trade Representative officials on Wednesday declined to specify what new actions will be taken, but they did not disagree that an announcement is expected as soon as Thursday.
“We’re getting very close,” said a USTR official speaking to reporters on condition of not being named. “The president will have the final say.”
Bracing for an anticipated harsh reaction from China, the official noted, “We recognize the potential gravity of the situation here.”
Depending on the severity of the measures taken by Trump, stock markets in Asia and elsewhere could be roiled, according to market analysts.
Trade groups representing American retail giants, such as Walmart, and tech companies, including Apple, warn that sweeping tariffs would raise prices for consumers in the United States and might not do much to reduce the trade deficit.