US Planning To Crack Down On Chinese Investments And Imports

The Donald Trump administration is now looking to stifle Chinese investments in the US, as part of its multi-pronged battle against trade offensives, and particularly to penalise China for alleged theft of intellectual property (IP) rights.

The Trump administration is also planning to impose tariffs on a broad range of its imports, which could include shoes and clothing to consumer electronics.

What’s more, an announcement in the coming weeks, following an investigation by the US Trade Representative’s office into China’s IP practices, may strengthen Trump’s resolve to impose trade restrictions.

The US is considering a more targeted approach to throttle Chinese investments under a probe into China called Section 301 action, wherein the administration will try and enforce reciprocity with China on foreign investment. This means the US would only permit takeovers in sectors that US companies can access in China, according to sources. This will be taken forward by a legislation aimed at reining in China’s influence with Treasury Secretary Steven Mnuchin urging closer scrutiny of foreign takeovers.

Mnuchin said the administration’s objective is to achieve a “fair and balanced” trading relationship with China. America’s trade gap in goods with the Asian nation surged 8 per cent last year to a record $375 billion.

The president is cruising ahead with these trade restrictions despite stirring up global trade tensions and upsetting allies like Canada and the European Union, which are threatening retaliation, which if translates into concrete action, would in all possibility open up a full blown trade war.

Trump’s announcement last week of tariffs on steel and aluminium imports has already rattled global trade tensions - and led to the resignation of his chief economic adviser Gary Cohn, who is against such measures. But all what Trump said on Cohn resignation was, he’ll be making a decision on a replacement soon and that there are “many people wanting the job.”