NEWS

Trump says US companies ‘hereby ordered’ to quit China

Published on: 28th August 2019

“Our great American companies are hereby ordered to immediately start looking for an alternative to China,” the president tweeted on Friday.

The president sent the tweet after China unveiled plans for duties of 10% on $75b of US goods. China’s new tariffs will range between 5% and 10% and apply to more than 5,000 goods coming from the US. Trump’s initial response was reciprocal; he tweeted that $250b of Chinese imports, currently taxed at 25%, would be taxed at 30% going forward.

However, the situation quickly escalated, resulting in a series of tweets aimed at US companies. The full twitter thread stated (sic): “Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. This is a GREAT opportunity for the United States. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!”

Trump later clarified that he was threatening to make use of the International Emergency Economic Powers Act to “order” companies to quit China, raising questions about whether it is appropriate to make the 1977 act – intended to target rogue regimes, terrorists and drug traffickers – the latest weapon in the US/China trade war. The act gives presidents the ability to regulate international commerce during times of declared national emergencies.

So far, Trump has not declared an emergency with respect to China. However, he told reporters: “If I want, I could declare a national emergency,” citing China’s theft of intellectual property and the large US trade deficit with China, claiming “in many ways that’s an emergency.” However, he added: “I have no plans right now.”

China’s Commerce Ministry issued a statement Saturday condemning Trump’s threat, saying: “This kind of unilateral, bullying trade protectionism and maximum pressure go against the consensus reached by the two countries’ heads of state, violate the principles of mutual respect, equality and mutual benefit, and seriously damage the multilateral trading system and normal international trade order.”

For world leaders seeking clarity on the Trump administration’s future approach to the US-China trade war at the G-7 meeting in France, the gathering proved a disappointment. On Sunday, Trump initially claimed he had “second thoughts” about the recent escalation of the US/China trade war, but the White House quickly followed up to clarify that he only regretted not being tougher on China.

President Trump’s trade adviser, Peter Navarro, told CNN that talks between the two countries were on schedule and argued that the tariffs were not hurting Americans. “Consumers aren’t feeling the pain (of the trade war) and we are focused on making sure they (China) feel the pain, not us.”

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