a path that could lead to unilateral actions. If that happens, it would be viewed as a strong action again China’s trade practices.”
China’s Cautious Response
Soon after the memorandum was released, China commented on the issue. “Within a day or two of Trump Administration releasing this statement, China spoke on the issue,” said Waack. “They recognized a government should put the interests of its people first, but economies work on an interrelated system, and China would not support the US going forward with 301. China does not want the US imposing restrictions on its trade practices.”
If the investigation leads to actions, and if those actions lead to tariffs, the costs would ultimately hit consumers. “If we impose tariffs on goods coming into the US, that’s going to cause friction. Some ask whether this is a good idea at a time when we want to work with China to curb the nuclear threats,” said Waack. “Plus, there is a potential cost impact on US businesses that trade in Chinese goods, and that cost would be passed on to US consumers.”
While the investigation is a soft first step, it could ultimately lead to severe actions, especially given Trump’s strong rhetoric on the issue. “At this point, the Trump Administration has asked the US Trade Representative to investigate China’s trade policies to see if they would recommend an action under 301,” said Waack. “Trump’s language on this was pretty strong. He said the US Trade Representative is empowered to investigate all trade options.”
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Rob Spiegel has covered automation and control for 17 years, 15 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years, he was owner and publisher of the food magazine Chile Pepper.