Source: Reining in China U.S. aim

European details tariff-relief offer

President Donald Trump's administration is pressing countries to ally with the U.S. in pushing back against Chinese trade policies in exchange for relief from American tariffs on steel and aluminum, according to a European official.

U.S. Trade Representative Robert Lighthizer has been leading negotiations under which countries may be excluded from the tariffs of 25 percent on imported steel and 10 percent on aluminum. American trading partners and U.S. companies are pressing for exemptions and exclusions from the tariffs, which take effect Friday.

In talks with the U.S., Lighthizer has laid out five conditions that countries must address before being excluded, said the official, who spoke on condition of anonymity. The information was also contained in an internal European Commission document seen by Bloomberg. A second non-U.S. official confirmed the broad outlines of the five conditions.

The qualifications are:

• Limiting steel and aluminum exports to the U.S. to 2017 levels.

• Actively addressing China's various trade-distorting policies.

• Being more assertive and cooperative with the U.S. at the G-20 Global Steel Forum.

• Cooperating with the U.S. in launching cases against Chinese practices at the World Trade Organization.

• Enhancing security cooperation with the U.S.

The U.S. trade representative's office didn't immediately reply to a request for comment.

Meanwhile, U.S. companies from Walmart Inc. to Amazon.com Inc. are warning Trump that any sweeping trade action against China could raise consumer prices, increase costs for businesses and hurt stock prices.

Broad-based tariffs on Chinese goods would "trigger a chain reaction of negative consequences for the U.S. economy," a coalition of more than 40 business groups led by the Information Technology Industry Council said Sunday in a letter to the president. The coalition includes groups representing retailers and makers of everything from toys to wine, while the council represents companies including Amazon, Alphabet Inc.'s Google, Facebook Inc. and Microsoft Corp.

"I'm glad they think it's a big problem, because we've been saying this for years," Robert Atkinson, president of the Information Technology and Innovation Foundation, said of Lighthizer's focus on China's alleged disregard for U.S. intellectual property. "With the tariff approach, I worry that the Chinese could effectively retaliate, for example by going after some key U.S. exports to China, like aviation."

Lighthizer has argued that China uses a range of practices to force companies to transfer intellectual property, and Chinese entities engage in widespread theft of U.S. trade secrets, as it seeks to become a leader in advanced manufacturing and artificial intelligence. U.S. businesses in China have long complained about being forced to hand over technology as the price of gaining access to the market.

Trump signed a proclamation ordering the tariffs on March 8, invoking a seldom-used legal clause that gives him the authority to impose trade penalties to protect national security. But he has also sought to leverage the tariffs to achieve other goals. He has threatened to withdraw exclusions for Canada and Mexico if the two nations don't agree to a new North American Free Trade Agreement that meets U.S. satisfaction.

Meanwhile, Trump has invited any country with which the U.S. has a "security relationship" to apply for an exclusion, setting off a global lobbying effort to secure relief from the tariffs. Australian Prime Minister Malcolm Turnbull has said his country has secured an exclusion, while countries from South Korea to Argentina are asking for similar treatment.

The European Union has aggressively pushed back against the U.S. tariffs, threatening retaliation against iconic goods including motorcycles, jeans and bourbon.

The effort to recruit allies to protest Beijing's trade policies comes as the Trump administration weighs broad tariffs against products made in China to punish the Chinese government for what the U.S. sees as abuse of American intellectual property. The U.S. is also considering restrictions on Chinese investments as part of the investigation, according to people familiar with the matter.

The Trump administration has frequently criticized China's economic policies, accusing the Asian nation of failing to deliver on changes it promised when it joined the World Trade Organization in 2001. After Trump announced the tariffs, China's foreign Minister, Wang Yi, vowed a "justified and necessary response" to any efforts to incite a trade war.

Information for this article was contributed by Andrew Mayeda and Jonathan Stearns of Bloomberg News.

Business on 03/20/2018

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