A week after signing off on import tariffs for the steel and aluminum, US President Trump showed his real intention when blocking the $140bn Broadcom (some say Chinese government-linked) takeover bid for US company Qualcomm.
His reasoning as to ‘security concerns’ for a US tech company falling into Chinese hands have many in the tech and mobile phone market fearing for more action, and broader-based tariff impositions to come. The real target: China.
<b> Chinese steel imports of $60bn</b>
Reuters news agency has, through an investigation of the worldwide steel market and its main players, calculated that the 25% tariff imposed by the White House administration, which could be exempt for ‘friends and allies’ as Mr. Trump put it, would be in China’s case targeting an industry that is sending some $60bn worth of steel to the US.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">LEAKED: Trump’s Next Shoe to Drop on US-China Trade: To punish China for intellectual property theft and retaliate against Chinese rules requiring technology transfers. This is the big one. It makes steel and aluminum tariffs look like a game<a href="https://t.co/iRdxML1YD6">https://t.co/iRdxML1YD6</a> <a href="https://t.co/daoKYbuRid">pic.twitter.com/daoKYbuRid</a></p>— Wolf Richter (@wolfofwolfst) <a href="https://twitter.com/wolfofwolfst/status/973747645301714945?ref_src=twsrc%5Etfw">March 14, 2018</a></blockquote>
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On a 25% tax basis, that means he’s just signed off on letting China pay $15bn to the US finance department per year.
<b>Intellectual property theft</b>
Furthermore, according to a senior White House trade official, Mr. Trump will move into the area of intellectual property theft by the Chinese next.
"The next action on the president's plate will be the Section 301 action which is designed, in a laser beam way, to address the issue of forced technology transfer, theft of intellectual property, and China's bid through the China 2025 architecture plan to capture the emerging industries of the future."
It is understood in industry circles that the current White House’s main concern is that if China takes control of industries of the future, such as robotics and artificial intelligence, "America will not have a future, at least economically."
China’s tech sector, with flagship companies ZTE and Huawei, is mostly blocked from dealing on the US market due to security concerns from the Pentagon. By blocking Broadcom’s planned takeover of Qualcomm, Mr. Trump has shown that he agrees with the military command on this.