Tariff list on China could broaden to include aerospace components, intellectual property

Show Caption Hide Caption China calls the U.S. a repeat abuser of world trade rules China accuses the United States of "repeatedly abusing" trade practices, as Beijing braces for an imminent announcement from U.S. President Donald Trump slapping more tariffs on Chinese imports.

WASHINGTON — Aerospace components. Information communication technology. Machinery.

The list of Chinese imports the Trump administration is considering slapping higher tariffs on as part of a broader effort to punish China for what it calls unfair trade practices could include items such as rocket parts and high-tech innovations.

The complete list is not expected to be released before next week. But the roster, on top of steel and aluminum tariffs the president unveiled last week, is intended to cost China about $50 billion — the estimated annual hit that its market strategies inflict on the U.S. economy, senior administration officials said Monday.

The list will be "based on an effort to balance pressure on China's unfair industrial policy while minimizing impacts on us," a senior official with the U.S. Trade Representative told reporters on a conference call. The official spoke on condition of anonymity because he wasn't authorized to speak publicly.

China already has warned the Trump administration that a trade war could ensue. Chinese officials have indicated they might raise tariffs on U.S. pork, aluminum pipe and other goods. China last year bought about $3 billion worth of the goods that could be affected by higher tariffs.

On Thursday, the Chinese Embassy in Washington said in a statement that "China is not afraid of and will not recoil from a trade war." It called Trump's moves "self-defeating," and said they would "directly harm the interests of U.S. consumers, companies, and financial markets."

While U.S. business leaders agree Chinese trade practices are unfair, they worry tariffs imposed by the administration would prompt Chinese countermeasures on American products, leading to higher prices on consumer goods.

If China chooses to go directly after U.S. soybeans, for example, exports could decline as much as 40% and result in more than $3 billion in lost income nationwide, according to some estimates.

“That’s a big deal,” said Wally Tyner, an agricultural economics professor at Purdue University in Indiana.

Most soybeans grown in the U.S. are exported, and China is the largest purchaser. Plus, countries make retaliatory decisions based not just on economics, but on politics, Tyner said. And hitting U.S. farmers would have an economic impact in the rural parts of the country where Trump did very well in 2016.

“They will come after his base,” Tyner said.

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Retaliation by China would be a "terrible" move, the senior USTR official said.

China caused the problem, the official said, by attacking the U.S. market for years. And how China is making it difficult, if not impossible, to compete fairly in China.

The expansion of tariffs is't the only step the Trump administration is pursuing.

The president has instructed the Treasury Department to explore potential restrictions on investments by China in key U.S. technology and key high-tech sectors.

And on Friday, U.S. Trade Representative Robert Lighthizer formally requested a ruling from the World Trade Organization "to address China’s discriminatory technology licensing requirements."

The filing, known as a Section 301 action, was initiated following what senior USTR officials described Monday as a "very robust investigation" that included discussions with think tanks, trade groups, law firms and even some parties that represent China.

The investigation found that: U.S. companies face undue pressure to share sensitive technology with Chinese companies to gain access to those markets; U.S. firms aren't given a fair opportunity to license their technology in China; China improperly buys and controls intellectual property developed in the U.S. for competitive advantage; and the Chinese government continues to hack into the computers of prominent U..S. companies such as U.S. Steel and Alcoa.

"We're doing things for this country that should have been done for many, many years," Trump said Thursday at a White House ceremony where he signed the Section 301 complaint.

"We've had this abuse by many other countries and groups of countries that were put together in order to take advantage of the United States, and we don't want that to happen," Trump continued. "We're not going to let that happen. It's probably one of the reasons I was elected; maybe one of the main reasons. But we're not going to let that happen."

Contributing: Maureen Groppe and David Jackson, USA TODAY