TARIFF TACTICS
Trump’s decision to ratchet up tariffs on Chinese goods mirrors his moves to escalate tariffs during his first-term trade wars with Beijing until serious trade negotiations took place between the world’s two largest economies.
With trade talks not materialising yet, there are signs Trump is preparing for a wider economic decoupling from China, dashing hopes that a deal might be reached in the near-term.
The White House last Friday released an America First investment memorandum which squarely placed China in a list of “foreign adversaries” and accused Beijing of seeking to exploit investments in US firms to steal cutting-edge technology and fund its military development.
“PRC-affiliated investors are targeting the crown jewels of United States technology, food supplies, farmland, minerals, natural resources, ports, and shipping terminals,” the document said, using an acronym for the People’s Republic of China.
Washington will also review the variable interest entity (VIE) structure allowing hundreds of Chinese firms to be listed in the US, potentially forcing them to delist if this loophole is found to be detrimental to US investors or enable fraud.
This would wipe about US$848 billion from US securities markets, according to 2024 figures from the US-China Economic and Security Review Commission.
Earlier this month, Trump nominated China hawk Landon Heid for a key post at the Commerce Department overseeing the design of AI chip export controls targeting China and other countries.
The State Department’s China page was also updated this month to include tougher language on China’s “restrictive” investment climate, unfair trade practices and tech competition.
The Chinese embassy had no immediate comment. China on Friday said it had cracked 38,000 drug-related criminal cases, seized 28.1 tons of drugs and captured seven drug fugitives in the past year, without specifying if any of those figures were related to the US or fentanyl.
Thus far, Chinese President Xi Jinping has not engaged in negotiations over fentanyl, instead applying limited 10 per cent retaliatory duties on US energy and farm equipment.
But Beijing could push back harder as Trump’s new tariffs reach 20 US per cent on US imports from China, on top of existing duties of up to 25 per cent imposed during Trump’s first term. US imports from China totaled US$439 billion last year, according to US Census Bureau data.
