With China’s Envoy Still in DC, Trump Announces Steel and Aluminum Tariffs


On March 2 — with a Chinese delegation led by Liu He, Chinese President Xi Jinping’s top economic adviser, still in Washington, DC — U.S.President Donald Trump announced that he will impose punishing tariffs on steel and aluminum.

Singling China out three times in his speech, Trump repeatedly blamed Beijing for the U.S. trade deficit and job losses in its manufacturing sector.

He said:

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

I remember when I was growing up, U.S. Steel, that was the ultimate company.  And today, you have so many closed plants… The WTO has been a disaster for this country, for our country.  In fact, the rise of China, economically, was — if you look at it — directly equal to the date of the opening of the World Trade Organization. It has been great for China and terrible for the United States, and great for other countries. But terrible for the United States.

Thus, Trump said he has decided to impose tariffs of 25 percent on foreign-made steel and 10 percent on aluminum for an unlimited period.

Trump’s decision is undoubtedly a harsh slap in China’s face.

From February 26 to 28, the 19th Chinese Communist Party (CCP) Central Committee just held an unusually early (and significant) third plenum session, with nearly 400 of the most powerful CCP officials attending.

Yet in an attempt to forestall a potential trade war between China and the United State, Xi allowed Liu — a member of the Political Bureau of the CCP Central Committee and director of the General Office of the Central Leading Group for Financial and Economic Affairs — to skip this meeting and rush to Washington.

Liu was scheduled to meet with U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and Gary Cohn, chief economic adviser to U.S. President Donald Trump, between February 27 and March 3.

However, Trump not only wasn’t swayed by the Chinese official’s presence, but announced the new tariffs without bothering to wait until Liu returns to China.

To make matters worse, on February 27 — the day of Liu’s arrival —  the U.S. Department of Commerce released its final ruling on an anti-dumping and countervailing investigation against the aluminum foil imported from China.

Determining that “exporters from China sold aluminum foil in the United States at 48.64 to 106.09 percent less than fair value” and “China is providing unfair subsidies to its producers of aluminum foil at rates of 17.14 to 80.97 percent,” the Commerce Department said it will instruct U.S. Customs and Border Protection to collect cash deposits from importers of aluminum foil.

At the regular press briefing on March 1, China’s foreign ministry spokesperson, Hua Chunying, condemned the U.S. decision and threatened to take countermeasures.

She said:

The [United States’] unreasonable and excessive use of trade remedy measures will not help revitalize relevant industries at home. Rather, it will affect its employment and jeopardize the welfare of American consumers. China will take necessary measures to safeguard its legitimate rights and interests.

Meanwhile, China’s Ministry of Commerce also released a lengthy statement on its website, condemning U.S. “wrongdoings” and likewise vowing that China will “take necessary measures.”

Based on the current rhetoric, it seems likely that as soon as Liu arrives back in Beijing from a fruitless U.S. trip, China will make the next move in a budding trade war.

Sign up for our weekly newsletter
The Diplomat Brief