When he was sworn in as president a good year ago, Donald Trump announced that he would take harsh action against unfair trade practices in or countries. This meant primarily China, but also or export-strong nations such as Japan or Germany. In meantime, contours of this new US trade policy are recognizable. They have what it takes to endanger global liberal economic order.
With imposition of punitive duties on imported solar panels and washing machines, Washington opened door for protectionist claims from or parts of US economy in mid-January. The example of US washer manufacturer Whirlpool, which actively advertised punitive tariffs against foreign competing products, could soon be followed by hundreds of companies in US and increase pressure on US government to take furr protectionist measures Take. This would primarily affect China as most important US trading partner in consumer goods sector.
Since summer 2017 has also been in room that US government could proceed with import restrictions or punitive tariffs on steel and aluminum against dumping imports. This would be possible under US legislation if president could credibly demonstrate that competition from abroad is a "threat to national security."
Against Chinese steel imports, US has been shielding import duties for years, but US industry does not go far enough to protect it. In case of aluminium, US government has been examining, since last November, wher national security is threatened by cheap imports – without company's own companies pushing for it. The measures would also harm Germany and EU as a whole.
Laura by DanielsResearch on Science and Politics Foundation (SGP), including transatlantic economic relations, trade and financial markets. The foundation advises Bundestag and federal government on all aspects of foreign and security policy. The article also appears on SWP website in "Short" section.
Shortly before his appearance at Davos economic meeting in January, Trump also announced that he would soon be dealing with "great penalties" against alleged mass ft of intellectual property. Already in National security strategy of December 2017, China emerges as largest rival in United States in this area. "Forced technology transfer" from US companies to Chinese business partners has left US economy "hundreds of millions of dollars in revenue" every year, " strategy document states.
Penalties against China come safelyUS penalties for stealing intellectual property would hit China harder than time-limited and comparatively harmless restrictions on solar systems and kitchen appliances. Apparently, president has an unpublished report from commercial authority that Trump ordered by executive order in August 2017. The authority examined wher China is using "unjustified, inappropriate or discriminatory" measures against US companies.
In response to such behaviour, president can take a number of countermeasures to limit investments. According to reports from environment of US commercial authority, question is no longer wher se penalties come against China, but when. This would presumably be justified by fact that China's industrial policy threatens "national security" of United States.
If Trump is serious about measures described, China will most likely take action. More difficult than by import duties, Beijing could meet Trump government by announcing its cooperation in nuclear conflict with North Korea.
New to Trump's trade policy is not, according to French economist Jean Pisani-Ferry in a recent post on Project syndicate that US government puts its national over interests of or countries. What is new and unusual is procedure outside international framework of WTO.
Date Of Update: 10 February 2018, 12:03
