US-China trade showdown: tariffs and firefighting
American lobbying group warns against looming import tax; Wang Qishan suits up
Trump is readying sweeping tariffs and investment restrictions on China, media reports suggest, only days after he announced controversial tariffs on metals imports.
Analysts continue to warn a potential move on China poses a greater risk of igniting a full blown trade battle than do the tariffs on steel and aluminum. Despite this, as The New York Times notes, tariffs on China are broadly popular among officials and lawmakers in Washington:
Unlike the steel and aluminum measure, which divided the president’s advisers and his own party, the idea of targeting China has broad support among a number of officials who believe China is cheating in global trade.
Gary D Cohn, a top economic adviser who resigned over the steel and aluminum tariffs, had approved of action against China, the people familiar with the discussions said.
China’s official Xinhua news agency highlighted a warning from the US Chamber of Commerce, America’s largest business lobbying group.
“The US Chamber would strongly disagree with a decision to impose sweeping tariffs … We urge the administration to work with the business community to resolve the concerns,” Thomas Donohue, president of the group, said in a statement.
The firefighter and the Trump whisperer
One Chinese diplomat is optimistic about the prospect of Wang Qishan playing a bigger role in the US-China relationship. Wang, a top ally of Chinese President Xi Jinping, is expected to be named vice-president with a portfolio including trade relations with the US. The South China Morning Post noted the prospects for Wang as a “firefighter,” tapped to quell the trade dispute.
“Of course it would be good to have someone who’s responsible for foreign policy among the top leadership – we haven’t seen such a figure in the top seven in the past, which is unusual in terms of the international practice,” said a diplomat, referring to the supreme, seven-member Politburo Standing Committee. […]
The diplomat said while it was expected that Wang would be involved in the trade issues with Washington because of his expertise in economics, it remained to be seen how he would handle other foreign policy matters and relations with countries other than the United States.
“At least the good thing is that he is pragmatic – he’s not hawkish,” the diplomat said.
The Washington Post wrote this week that billionaire investor Stephen Schwarzman has been putting in time trying to tame Trump’s approach to China. The investor arguably has one of the closest relationships with leaders in Beijing of any US executive, and has reportedly emerged as a key informal advisor to the president.
Through a spokesman, Schwarzman declined to reveal his response, but associates said his main message to Trump over the past 14 months has been consistent: Keep in mind the broader importance of the U.S.-China relationship.
A few days later, on March 7, Trump signaled that he was open to a compromise with Beijing on trade. “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States,” he tweeted. “Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with.” […]
Schwarzman may have lost this round on China. And Trump could further strain bilateral relations with his decision on Monday to block Broadcom’s bid for Qualcomm on national security grounds, apparently because of concerns that it might give China an edge in sensitive technologies. But Schwarzman’s ongoing relationship with the president — particularly after the departure of White House economic adviser Gary Cohn — leaves him as one of the last remaining free-trade advocates with a direct line to Trump.