Trump set for China tariff announcement on Thursday, trade war fears grow

WASHINGTON (Reuters) – President Donald Trump will announce tariffs on Chinese imports on Thursday, a White House official said, in a move aimed at curbing theft of U.S. technology and likely to trigger retaliation from Beijing and stoke fears of a global trade war.

There was no indication of the size and scope of the tariffs, which U.S. Trade Representative Robert Lighthizer said on Wednesday would target China’s high-technology sector and could also include restrictions on Chinese investments in the United States. Other sectors like apparel could also be hit.

“Tomorrow the president will announce the actions he has decided to take based on USTR’s 301 investigation into China’s state-led, market-distorting efforts to force, pressure, and steal U.S. technologies and intellectual property,” the official said.

The White House said Trump would sign a presidential memorandum “targeting China’s economic aggression” at 12:30 p.m. (1630 GMT) on Thursday.

The investigation by the United States under Section 301 of the 1974 Trade Act has identified theft from and coercion of U.S. companies to disclose their intellectual property as well as purchases by Chinese state funds of U.S. companies for their technology knowledge.

Lighthizer told the House of Representatives Ways and Means Committee, a top economic panel, that the aim would be to minimize the impact of any tariffs on U.S. consumers.

China has threatened to retaliate by hitting U.S. agricultural exports if tariffs on Chinese imports worth up to $60 billion are announced by Washington.

“The remedies, in my judgment at least, would be one, doing something on the tariff front, and two, doing something on the investment front, and then perhaps other things,” said Lighthizer, a lawyer and veteran trade negotiator.

The United States runs a hefty goods trade deficit with China of $375 billion. Estimates of the cost of counterfeit goods, pirated software and theft of trade secrets could be as high as $600 billion, according to one study.

Talk of a global trade war emerged earlier this month when Trump announced hefty tariffs on steel and aluminum imports, aimed at hitting Chinese overproduction, but which could also affect key allies like members of the European Union.

Lighthizer conceded that China would likely hit back with measures on U.S. agricultural exports, particularly soybeans, and said if that happened, Washington would impose “counter-measures,” although he said that “nobody wins from a trade war,” a stance that appeared to put him at odds with Trump who has termed trade wars “good and easy to win”.

Since taking office, Trump has taken a hard line on trade, abandoning a 14-nation Pacific trade pact and threatening to pull out of the North American Free Trade Agreement with Canada and Mexico.

He has also attacked Germany, saying it hides behind tariffs to win an export advantage for its car industry.

The administration has been forced to walk back some of its steel and aluminum measures, granting exemptions to Canada and Mexico and entering talks with the European Union and others to discuss potential exemptions.

CHINA STEELS ITSELF FOR RESPONSE

China has already identified agriculture as a U.S. weak point and has said it would target soybeans, a $14 billion-a- year business. America’s farm states heavily backed Trump in his presidential election win.

“China does not want to fight a trade war with anyone. But if anyone forces us to fight one, we will neither be scared nor hide,” Foreign Ministry spokeswoman Hua Chunying said.

“If, in the end, the United States takes actions that harm China’s interests then China will have to take resolute and necessary steps to respond to protect our legitimate interests.”

The European Union’s response to the threat of steel and aluminum tariffs also targeted areas where Republicans are vulnerable, threatening Harley-Davidson motorcycles, which are made in House Speaker Paul Ryan’s home state of Wisconsin.

While China has stepped up its rhetoric, it is far from clear that Beijing is ready to take the next step and move to an economic confrontation that would pit the world’s two leading economic powers against each other.

Financial markets reacted to the Trump steel and aluminum tariffs with an initial sharp sell-off, although they have since regained their poise.

A global trade war would have much harsher economic consequences, possibly hitting the dollar, U.S. stock markets and currencies as varied as the Mexican peso and the Australian dollar, according to analysis from investment bank Morgan Stanley.

A targeted use of Section 301 that covered $60 billion of Chinese high-tech products could see a response from China that is relatively muted, the bank said in a report, with agriculture and transport equipment being hit in return,

“This would have a moderate impact on growth in both the U.S. and China,” it said.

The risk of an escalation in which there were a broad-based tariff across a range of Chinese goods followed by a response from Beijing that was commensurate with that would cause a hit to U.S. and Chinese growth, a rise in U.S. inflation and possibly prompt China to take domestic action to boost growth.

Additional reporting by David Lawder in Washington and Stella Qiu and Ryan Woo in Beijing; Editing by Alistair Bell and Peter Cooney

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Fourth nor’easter in three weeks blankets I-95 corridor in snow

Plows were out in force Wednesday across the region.

“Hit the ATM, get lots of coffee, know which rest stop you’re going to, pack a lot of sandwiches, extra pair of socks and we’re off,” Mike Stevens, a snowplow driver, told NBC New York.

At least one fatal car crash in New York and two in New Jersey were blamed on poor visibility and slippery conditions caused by the storm. The governors of New York and New Jersey declared states of emergency as the storm picked up.

“Travel will be impacted because of the heavy, wet nature of the snow, so anyone trying to shovel out a driveway will feel like they’re shoveling cement,” said Sherri Pugh, a meteorologist for NBC News. “Some people may have arrived to work this morning but may have trouble leaving.”

New York State Police reported that the storm caused a death after a van carrying five people rolled over on the Wantagh State Parkway. The other passengers were in critical condition, NBC New York reported.

New Jersey Gov. Phil Murphy told reporters in a conference call that a bus and another vehicle collided on Interstate 78 in Hunterdon County, killing one person.

A motorist was also killed Wednesday in a crash involving a snow plow in Newark, New Jersey.

New Jersey Transit pulled all its buses off the roads statewide at 3 p.m. as the storm picked up and visibility dropped.

The storm is the product of a weather system that previously vexed the South: hail in Texas on Sunday, tornadoes in Alabama on Monday and severe storms in Florida on Tuesday, later developing into the nor’easter blanketing the Atlantic coast from North Carolina to New England in snow. This time around, the heaviest snowfall was expected between southeast Pennsylvania and Connecticut.

Utility companies reported that more than 88,000 customers remained without power in the mid-Atlantic states and New England after midnight Wednesday — 73,000 of them in New Jersey alone.

During a news conference Wednesday, New York Mayor Bill De Blasio encouraged workers: “If you don’t need to be out, don’t be out. And if you are at work, try to leave work early.”

Pop star Justin Timberlake took that advice and postponed a concert scheduled for Wednesday night at Madison Square Garden. The “Can’t Stop This Feeling” singer said a replacement date was forthcoming.

Timberlake was still planning to perform Thursday, and New York City schools were also reopening the day after the storm. Boston schools will be closed on Thursday, however.

And by midnight, Washington was likely to double the 4 inches of snow it accumulated over the entire winter.

“It’s certainly been a rough winter for the Northeast,” Pugh said. “Everybody’s had a good bit of snow on this side of the country.”

The last time the region endured four Nor’easters in such close succession was in 2015, when four storms hit from Jan. 26 to Feb. 15.

Meanwhile, central and southern California were getting drenched in torrential rains, with forecasts predicting 3 to 5 inches through Friday.

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