U.S President Donald Trump has announced sweeping tariffs on some $60 billion of Chinese imports.
Those sweeping tariffs against China are the result of an inquiry started last summer under section 301 of the U.S. Trade Act.
It may sound obscure, but it gives Trump very important powers, as Owen Fairclough explains.
Last August, President Trump announcing an inquiry last summer into allegations that Chinese trade practices are harming the U.S.
“We will combat the counterfeiting and piracy that destroys American jobs. We will enforce the rules of fair and reciprocal trade that form the foundation of responsible commerce,” Trump said at the time.
It was carried out under Section 301 of the U.S. Trade Act and centers on claims that China has flouting copyright laws and forced U.S. companies to hand over trade secrets.
Trump has imposed tariffs unilaterally on China after deciding it’s guilty of these allegations. He doesn’t even need congressional approval.
This has raised the prospect of a global trade war.
While that sounds dramatic, these section 301 complaints have been a feature of U.S trade disputes for years – particularly during the 1980s under Ronald Reagan, another Republican president.
In 1983, when Luke Skywalker was battling Darth Vader and the Emperor in Star Wars Return of the Jedi, Hollywood studios filed a complaint against Taiwan blocking distribution of their movies.
In the same year, Taiwan was also accused of blocking American rice, while Japan Brazil faces similar charges over U.S. made leather goods; South Korea over wire rope; and the European Union over soy beans.
These disputes were ultimately resolved. And while China has threatened retaliation if tariffs are imposed in this latest it’s determined to avoid this.
China’s Foreign Ministry spokesman Lu Kang told reporters recently: “We have said many times, there are no winners in a trade war. It can only harm people.”
The costs of a trade war are difficult to estimate because the knock-on effects would be global, but they appear high enough for a cross-section of U.S. industries – from snow sports to toy makers – uniting in warning Trump against imposing tariffs on China.