Tensions Rise Between U.S. And China Over Trade Actions

Jun 15, 2018
Originally published on June 15, 2018 7:05 pm
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AUDIE CORNISH, HOST:

The trade fight between the U.S. and China entered a new phase today. This morning, the Trump administration unveiled tariffs on $50 billion worth of Chinese products. Then Beijing responded, announcing tariffs of an equal scale against the U.S. This is making a lot of people nervous - investors, manufacturers, farmers. They're all watching very closely. Also watching closely, NPR's Chris Arnold. He joins us now. Hey there, Chris.

CHRIS ARNOLD, BYLINE: Hey, Audie.

CORNISH: Tell us more about this move in Washington. What exactly is the Trump administration doing?

ARNOLD: Well, what we have now is the final list of products that are going to be targeted with these tariffs. And we have a date. This was kind of hanging in the air. But now we know that most of these new tariffs will go into effect July 6. And the tariffs are very targeted, and they're focused on China's emerging technology industries. There's more than a thousand specific items we're digging through, but this includes engine parts that go into aircraft and cars. There's industrial robots, turbines, stuff for nuclear reactors, all sorts of other machinery. So this is high tech, not, like, cheap T-shirts and TVs that you might buy at a retail store.

CORNISH: How will the rest of us notice, then, any direct impact of these tariffs?

ARNOLD: Well, we probably won't, shopping for T-shirts and stuff, any time soon. But American manufacturers - this has come up before any time we're talking about tariffs - that if companies have to pay more to get this industrial equipment, that's going to filter through and ripple through the economy. And at the end of the day, consumers will feel higher prices, just maybe not immediately, is sort of how it works.

CORNISH: Help us understand this part of the policy, that the White House is targeting China's emerging technology industries. What does that mean?

ARNOLD: Right. And so this is really interesting. This goes at the heart of China's ambition right now. And China doesn't want to be America's cheap labor workshop anymore. And to that end, it has this plan to become a high-tech leader of the world by 2025. And that seems reasonable, right? I mean, you know, any country wants to have a better economy and better industries and stuff.

But the problem is that there's widespread agreement that China is cheating and getting an unfair advantage. And these same industries are very important to the United States. There's been espionage. There's been companies forced to give over trade secrets. There's all kinds of stuff. So the president talked about some of this on Fox News.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: We have the great brainpower in Silicon Valley. And China and others steal those secrets. And we're going to protect those secrets. Those are crown jewels for this country.

ARNOLD: And most economists actually agree that this is the most defensible beef, if you will, that the administration has with China in this whole trade fight, that there's this race to own the future and future technologies going on. And China hasn't been playing fair for years.

CORNISH: Meanwhile, we have been reporting that China is firing back with its own tariffs. Who in the U.S. - who's going to be hurt by this?

ARNOLD: Well, there are scores of agricultural products on China's list - and again, we're going through - is pork, beef, chicken, but in particular soybeans, that this is really going to affect farmers. Half of U.S. soybean exports go to one country. And, you might guess, it's China. I spoke to a soybean farmer, Davie Stephens, who is in western Kentucky today in a tractor. We reached him on his cellphone. He plants exclusively soybeans and corn.

DAVIE STEPHENS: It's true that it's a huge threat to my farm business and every farmer's business. This year, you know, there's record soybeans that have been planted. You'll have a huge amount of supply that has nowhere to go.

CORNISH: And Stephens is in Kentucky, as you said, a state that President Trump won in 2016. If China's retaliation hurts farmers and manufacturers, do you think there could be a political backlash here?

ARNOLD: Well, we'll have to see. I mean, you know, Trump voters on the one hand might like to see the president's out there swinging his fist and taking on China. But if too many farmers and small businesses and manufacturers are getting hurt, that's going to create more and more pressure. The soybean farmer group, by the way, has a hashtag - Rethink The Tariffs - social media campaign underway.

CORNISH: That's NPR's Chris Arnold. Chris, thank you.

ARNOLD: Thanks, Audie. Transcript provided by NPR, Copyright NPR.