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Trump, Stung by Being Attacked as Soft on China, Pushes Ahead on Tariffs
WASHINGTON — President Trump, stung by criticism that he has gone soft on China and less worried about Beijing’s ability to disrupt a potential summit meeting with North Korea, reversed course on Tuesday and declared that the United States would impose tariffs and other punitive measures on China.
Barely a week after Treasury Secretary Steven Mnuchin said that the trade war was “on hold” and that tariffs would be suspended as negotiations continued, the White House issued a statement saying the United States would move ahead with its plan to impose 25 percent tariffs on $50 billion worth of imported Chinese goods within the next month.
Mr. Trump’s reversal was yet another twist in a long-running ideological battle in the West Wing between economic nationalists, who channel Mr. Trump’s protectionist instincts, and more mainstream advisers like Mr. Mnuchin, who worry that tariffs and investment restrictions will hurt the stock market and hobble long-term growth.
The nationalists seem to have won this round. While Mr. Trump is sending Wilbur Ross, the commerce secretary, to Beijing this weekend to try again to resolve the dispute, people briefed on the talks said Mr. Trump was frustrated with the first round of trade negotiations and wary of giving Democrats an opening on one of his core issues.
The trade offensive comes at a sensitive moment, days after Mr. Trump pulled out of his planned June 12 meeting with the North’s leader, Kim Jong-un, after suggesting that China played a role in derailing the encounter. But the president has since expressed more optimism about the meeting, and negotiators from Washington and Pyongyang have scrambled to reinstate it, giving Mr. Trump a freer hand to resume his tough approach to America’s greatest economic adversary.
In addition to the renewed trade threat, the United States has hardened its military posture toward China, canceling an invitation for the Chinese to take part in a large Pacific naval exercise and sailing two Navy warships past a handful of disputed islands in the South China Sea. The administration is pushing back against China’s installation of military facilities in the heavily trafficked waterway.
“On every issue, the balance of power in this administration leans toward a more hostile and adversarial relationship with China,” said Jeffrey A. Bader, a former top China adviser to President Barack Obama.
But Mr. Bader cautioned that Mr. Trump’s threat of tariffs could still be a purely tactical move and a cudgel to force concessions from China, similar to the approach he has used with several of America’s closest trading partners.
“To me, it is not at all clear that Trump has turned his back on a deal,” he said.
Last week, the administration announced a sweeping new investigation that could result in tariffs on imported automobiles — a move trade experts said was designed to ramp up pressure on Mexico and Canada in negotiations over the North American Free Trade Agreement.
On Friday, temporary exemptions to steel and aluminum tariffs that the White House granted to the European Union, Canada and Mexico are set to expire, raising the question of whether the countries will fold to Mr. Trump’s trade requests or retaliate.
Hours after the tariffs on China were announced, the Chinese Ministry of Commerce accused the White House of going back on its word, even as it hinted that Beijing expected such a reversal.
“We feel surprised by the tactical statement issued by the White House, and yet it was also unsurprising,” a statement from the ministry said, adding that China would “defend the interests of the Chinese people and core national interests.”
“This is clearly contrary to the consensus that China and the U.S. reached not long ago in Washington,” the statement said.
The last round of trade talks ended on May 19 with the two sides issuing an upbeat but vague joint statement that revealed little progress toward resolving a long list of complaints from the American negotiators. Mr. Trump, who made getting tough on China a centerpiece of his campaign, has often talked about challenging what he believes are its unfair trade practices.
But his advisers are deeply divided over how best to do it. Some, like Mr. Mnuchin and Mr. Ross, are focused on a compromise deal that would require China to buy huge amounts of American products to reduce its trade surplus, while still forestalling the possibility of a trade war.
Others like Peter Navarro, a top White House trade adviser, and Robert Lighthizer, the United States trade representative, have pushed for tougher action. They want China to undertake radical reforms, ending the subsidies it provides to developing industries and allowing American companies equal access in the Chinese market.
Hours after Mr. Mnuchin said a trade war was on hold, Mr. Lighthizer, who has been leading the investigation into China’s trade practices, issued a statement that was viewed as a repudiation of his colleague. He said that “real work” still needed to be done to make changes in the Chinese system, and that the United States would use “all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations.”
Mr. Trump’s handling of a Chinese telecom company, ZTE, became another flash point. On Friday, he said he had reached a deal that would allow the firm, which was recently banned from buying American components as punishment for violating United States sanctions, to remain in business. That prompted a slew of criticism from lawmakers that he was backing off his tougher promises on trade and letting a Chinese telecom company that did business with Iran and North Korea off the hook.
“Yes they have a deal in mind. It is a great deal... for #ZTE & China,” Senator Marco Rubio, Republican of Florida, said in a tweet.
Senator Chuck Schumer of New York, the Democratic leader, tweeted, “If the administration goes through with this reported deal, President Trump would be helping make China great again.”
Those swipes rankled Mr. Trump, according to current and former White House officials. In a midterm election year, they said, the president does not want to leave an opening to Democrats on trade. Mr. Trump expressed his unhappiness to Mr. Mnuchin, who had urged him to settle the ZTE issue and seek a trade truce with Beijing.
“There may be some momentary confusion, but his default position is, you’ll never get to the right of him on China,” said Stephen K. Bannon, who served as Mr. Trump’s chief strategist and is a leader of the nationalist movement.
In April, the administration detailed a list of Chinese goods that would be subject to tariffs, including flat-screen TVs and medical devices. It then held a series of hearings on the tariffs, giving the public a chance to influence the targeted products.
On Tuesday, White House officials said that they would issue the final list of goods subject to the tariffs by June 15, and impose the duties shortly after that. Mr. Trump has also threatened additional tariffs on $100 billion of Chinese products that, for now, will not go into effect.
The White House also said it would move forward with restrictions on Chinese investment and with stronger export controls to limit the access that Chinese people and companies have to American technology — a measure the administration said was for national security purposes.
Those restrictions will be announced by June 30 and adopted soon after that, the administration said, adding that the United States would also continue to pursue a trade case it filed against China at the World Trade Organization involving intellectual property rights.
Mr. Schumer offered the president highly conditional praise. “This outline represents the kind of actions we have needed to take for a long time, but the president must stick with it and not bargain it away,” he said in a statement.
Representative Richard E. Neal, Democrat of Massachusetts, said the administration was merely trying to save face “by rattling its saber with new deadlines,” after having undermined American national security interests by easing penalties on ZTE.
“Without a coherent strategy,” he said, “it’s hard to see the renewed commitment to threatening tariffs and investment restrictions as anything but more bluster and chaos.”
Mr. Trump’s willingness to cut a deal on ZTE also raised questions about his motives, given that days before he said he would help the company, China granted his daughter, Ivanka Trump, seven new trademarks across a broad collection of businesses, including books, housewares and cushions.
Mr. Trump’s latest trade moves have provoked retaliation from China, which has promised its own potential tariffs on $50 billion in American goods. Chinese officials say they do not dismiss anything as an idle threat.
“We have to consider this seriously — we have to listen to his words and watch his actions,” Li Gang, the vice president of the Commerce Ministry’s research and training institute, said in a recent interview in Beijing.
An earlier version of this article misstated when the Trump administration said it would proceed with punitive trade-related measures against China. It was on Tuesday, not Monday.
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Keith Bradsher contributed reporting from Shanghai.
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