Levi’s and Harleys at stake as EU hits back at Trump

John Harney and Jonathan Stearns

The world economy lurched closer to an all-out trade war as the Trump administration accused China of threatening US economic interests and as the EU made good on its threat to hit American goods with retaliatory tariffs.

A scathing report by the White House blamed Beijing for hijacking intellectual property and pursuing destructive industrial policies, saying the nation’s spectacular economic growth “has been achieved in significant part through aggressive acts, policies and practices that fall outside of global norms and rules.”

“Given the size of China’s economy and the extent of its market-distorting policies, China’s economic aggression now threatens not only the US economy, but also the global economy as a whole,” according to the 35-page document.

The White House report came out just before the EU triggered the first phase of retaliation against the US over its metal-import tariffs, approving a 25% duty on €2.8bn of US products including Harley-Davidson motorcycles and Levi jeans.

It opens up a second contentious trade front for US President Donald Trump, who ordered US officials on Monday to consider imposing tariffs on an additional $200bn (€172bn) in Chinese imports — with another $200bn to be added if Beijing retaliates.

“We did not want to be in this position,” EU trade commissioner Cecilia Malmstrom said yesterday.

“However, the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice.”

The trade skirmishes are not holding back the US economy just yet, which is booming this quarter as tax cuts power consumers and businesses.

Still, as risks to that outlook mount, economists are pointing to higher checkout prices on a range of tech, apparel and household goods for US consumers should Mr Trump follow through with his latest tariff threats.

Just last week, President Trump unveiled plans to implement previously announced tariffs on $50bn in primarily industrial goods. China has said it will match those levies in kind, and has already responded to earlier duties on metals imports.

The US government has long complained that China obtains American intellectual property and technology through underhanded means, and the White House report restated many of those concerns, including about hacking, physical theft of trade secrets and evasion of export control laws.

The Chinese government says that it is working to improve intellectual property protection.

Companies surveyed by the EU Chamber of Commerce do see some improvement, though a slim majority say protection of intellectual property in China is still inadequate.


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