The White House last month said it would on June 15 release a list of products imported from China to be targeted for tariffs in retaliation for what it says is Beijing’s systematic theft of US intellectual property. The move came despite China’s pledge to buy some $70bn in US farm and energy exports and plans for more talks between the world’s two largest economies aimed at avoiding a trade war.
The tariffs were delayed until after President Donald Trump’s Singapore summit with North Korea’s Kim Jong Un this week as Washington solicited China’s help in bringing North Korea to the negotiating table. Releasing the list would be seen by China as a provocative gesture, with US secretary of state Mike Pompeo due to visit Beijing on Thursday to brief Chinese officials on the Singapore talks.
Senior US officials also have agreed to go a step further and begin imposing the 25 per cent tariffs quickly after the list is released, with some duties possibly taking effect immediately on Friday, according to people briefed on the preparations. The administration would have up to 30 days to impose tariffs under the law being used, but officials are determined to move more quickly, the people said.
The decision to proceed was made by cabinet officials before Mr Trump travelled to last weekend’s contentious G7 meetings in Quebec and on to Singapore. As a result, people briefed on the discussions cautioned that the president, who has been eager to present the summit as a success, might decide to delay any rollout of new tariffs against Beijing — an outcome they said Mr Pompeo supports.
“It would be the height of irony, the irony of ironies, if the president having so long wanted tariffs and been constrained by members of his cabinet . . . now decided to go against his cabinet and to put them on hold,” said one person familiar with the White House discussions.
The person said US trade representative Robert Lighthizer and his aides think “it’s time to rip the band aid off and get on with it.”
Mr Lighthizer’s office and the state department declined to comment.
The administration is also preparing new restrictions on Chinese investment in the US and export controls on sensitive products, which it is expected to present on June 30.
But according to people briefed on those preparations the new limits have been the source of a contentious inter-agency debate. Officials at the commerce department have resisted efforts by China hawks in the administration to target “industrially significant” products for export controls, arguing that would be far broader than the current designations on national security grounds and would thus be open to legal challenges from affected companies.
That resistance, people briefed on the discussions said, had led to commerce officials being excluded from the process. A commerce department spokesman, however, said officials there were still working with other agencies on the list of products to be targeted for export controls.
The moves come as the White House is fending off a bid by some in Congress to force it to unwind a controversial $1.4bn settlement with Chinese telecommunications company ZTE following Mr Trump’s intervention on its behalf.
Mr Trump has said his Chinese counterpart, Xi Jinping, personally requested that the US re-examine a ban on ZTE’s sourcing of US parts, which was imposed after it was caught breaking the terms of an earlier settlement for violating US sanctions against Iran and North Korea. But the president has faced a bipartisan rebellion in Congress, where critics have called lifting the ZTE ban an unnecessary concession to Beijing and have attached a provision to restore it to a military funding bill.
The White House on Wednesday said it would work with congressional leaders to remove the ZTE provision from the defence appropriation bill, claiming it would impinge on the law enforcement powers of the commerce department.
While the provision is unlikely to be taken out of the Senate appropriations bill, it is not included in a version passed by the House of Representatives. The White House said it would intervene to have it stricken during the process to reconcile the two bills.
“The massive penalties imposed on ZTE are part of a historic enforcement action taken by the Department of Commerce. This will ensure ZTE pays for its violations and gives our government complete oversight of their future activity without undue harm to American suppliers and their workers,” a White House spokesman said.