A Commerce Department proposal that would allow companies to ask for targeted duties against imported Chinese products would benefit from this week’s Treasury designation of China as a currency manipulator and, if implemented, could see a flood of new cases seeking protection and retaliatory tariffs.
Beyond all that, Hufbauer argues the administration could raise further barriers to Chinese investment in the U.S. or target China’s energy supply by revoking waivers that allow Beijing to continue purchasing oil from Iran and Venezuela.
Trump has said an easing of restrictions on sales to China’s Huawei Technologies Co. that was part of a now-ended truce during a meeting with Chinese leader Xi Jinping in Japan at the end of June will still go ahead. But the White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei after Beijing boycotted purchases of U.S. farming goods, according to people familiar with the matter.
Former and current administration officials also caution other export restrictions and policies targeting China that were on hold, or delayed as Trump pursued a deal, could be revived.
Among those is the proposed blacklisting of Chinese companies involved in surveillance operations in China’s western Xinjiang province, where authorities have conducted mass detentions of Muslim Chinese.
Robots, AI
The Commerce Department has also been working on broader export restrictions on products from emerging industries such as robotics and artificial intelligence that would require special licenses to be exported to places like China.
The process to update the list of controlled technologies has been ongoing and likely will take until later this year to be finalized. American tech companies have been lobbying against a broad interpretation of national security or including wide categories such as semiconductor technology, arguing it could stymie U.S. research spending.
There are multiple bipartisan bills in Congress that Trump could back such as one introduced recently that would require the Fed to manage the dollar’s value to benefit American exporters and impose a tax on inbound capital as well as others that would deny Chinese firms access to U.S. equity markets. Also circulating is legislation that would shut off Huawei and fellow Chinese telecoms equipment maker ZTE Corp. entirely from U.S. suppliers.
Michael Pillsbury, an occasional adviser to the Trump administration, insists that while Trump “has more guns” he also has a more pragmatic view of China than his aides and is still eager to cut a deal. “The key is to get the message to Xi, and not with a blunderbuss,” Pillsbury said.