The administration accuses China of using predatory practices in a push to overtake US technological dominance. These practices include cyber-theft and coercing American companies into transferring their technology to Chinese partners as a condition of access to China's market.
The dispute could be hard to resolve. The US is effectively requiring Chinese leaders to abandon or scale back a high-tech push that they consider vital to their country's future.
The steel spat
Trump has enraged such US allies as the European Union, Canada and Mexico by hitting them — and just about everyone else — with a 25 per cent tariff on imported steel and a 10 per cent tariff on imported aluminum. What galls them most is the president's justification: Using a little-used weapon in US trade law, he has declared that the imported metals are a threat to America's national security.
The steel and aluminum tariffs have drawn retaliation from a host of US trading partners. The EU targeted American exports that could inflict political pain, including bourbon (a product produced in Kentucky, home state of Senate Majority Leader Mitch McConnell, and Harley-Davidson motorcycles, made in Wisconsin, home state of House Speaker Paul Ryan.
The NAFTA rewrite
On the campaign trail, Trump attacked the 24-year-old North American Free Trade Agreement with Canada and Mexico as unfair to the United States. The pact eliminated most trade barriers among the three countries. It opened markets for US farmers but led some American automakers to shift production to low-wage Mexico and to then ship cars back to the United States duty-free.
Trump vowed to either negotiate a better deal or abandon NAFTA. Abandoning NAFTA, though, would disrupt the complex supply chains that manufacturers have built across the bloc's borders and likely drive up US car prices.
The negotiations began in August but have stalled over US demands designed to discourage investment in Mexico and to shift auto production back to the United States. Trump's attempt to use the steel and aluminum tariffs to pry concessions from the Mexicans and Canadians proved futile.
Trump this month said he doubted he could achieve a deal he likes until after the U.S. midterm elections in November.
Auto wars
Reprising the tactic he used against steel and aluminum imports, Trump in May ordered the Commerce Department to investigate whether imported vehicles and auto parts pose a threat to US national security that justifies tariffs. The proposal drew scorn from economists and European officials.
Trump sometimes changes his justification for seeking auto tariffs. In a tweet last month, he complained about EU trade barriers and warned that "if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20 per cent Tariff on all of their cars coming into the US Build them here!"
German Chancellor Angela Merkel, seeking to avoid a trade war, has expressed support for eliminating the EU's auto tariffs.
- AP
