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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Lucky Breaks, Video and Pink Gloves Led to Austin Bombing Suspect

By the end of the day Wednesday, police had another tool: A 25-minute confession, left on the suspect’s phone, in which he attempted to describe his odyssey. “It is the outcry of a very challenged young man talking about challenges in his personal life that led him to this point,” the Austin police chief, Brian Manley, said.

Interviews with political leaders briefed on the inquiry, along with briefings from investigators and a federal law enforcement source, shed light on an investigation that saw hundreds of federal agents descend on Austin, gathering and reconstructing bomb fragments, interviewing witnesses and gathering video footage. “We haven’t seen an effort like this in many, many years,” said Christopher H. Combs, special agent in charge of the F.B.I.’s office in San Antonio.

Officials said Mr. Conditt planted one bomb in the upscale Travis Country neighborhood of Austin on Sunday, and tied the bomb’s tripwire to a “Caution: Children at Play” sign — which he himself put next to the sidewalk and that he bought, along with four others, at Home Depot. Investigators used his cellphone data to put him at the scene of explosions in Austin and also got his Google search history. But officials said the crucial first break came when Mr. Conditt mailed the packages at the FedEx store earlier this week.

Representative Michael McCaul, Republican of Texas, said that when Mr. Conditt left the FedEx office, he got into a pickup that had been called in by others as a potential lead. “And then they got the license plate and from there were able to get the cellphone number,” he said, adding that from there, agents could track the cellphone directly, “as a location device.”

Mr. Conditt’s suicide left more questions than answers about who he was, how he became a bomb-maker and why he did it. But Chief Manley seemed to assuage worries about more bombs when he said all seven had been accounted for. Law enforcement officials had worried that Mr. Conditt might have placed or sent additional bombs in the hours before he died. And officials said they were still looking into whether Mr. Conditt had any accomplices.

In the Austin suburb of Pflugerville, where Mr. Conditt grew up and lived, a steady fear persisted throughout the day, even after his death. Neighbors were forced to evacuate from the area surrounding the house Mr. Conditt shared with two roommates after investigators found explosive materials there. They were allowed to return late in the day.

The Austin police said they had questioned Mr. Conditt’s two roommates. One had been released; the other was still being questioned as of Wednesday afternoon. Neither roommate was identified. Outside Mr. Conditt’s parents home in Pflugerville, Detective David Fugitt with the Austin police said Mr. Conditt’s family was cooperating and was allowing investigators to search the property, including several backyard sheds.

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“We don’t have any information to believe that the family had any knowledge of these events,” Detective Fugitt said.

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Pflugerville is a tranquil Austin suburb nearly 20 miles northeast. It is a spacious town of 59,000 that has long made its unusual name with the silent first letter part of its charm, as visitors notice when they pass such businesses as Pfast Lube. At times on Wednesday, Mr. Conditt’s hometown was transformed. Military-style SWAT vehicles sped down the wide avenues. Neighbors and friends said they were stunned that Mr. Conditt was the serial bomber.

“He always seemed like he was very polite,” said Jeff Reeb, 75, who has lived next door to Mr. Conditt’s parents for about 17 years. “It’s extremely shocking. My summation is it doesn’t make any sense. It just doesn’t make any sense, which, most of these things like this, don’t make any sense.”

Mr. Conditt was a home-schooled student who had attended Austin Community College. He described himself on a blog as “not that politically inclined” but expressed conservative views on issues like gay marriage and the death penalty. Friends and neighbors described him as a loner.

“He was a nerd, always reading, devouring books and computers and things like that,” said Donna Sebastian Harp, who had known the Conditt family for nearly 18 years. “He was always kind of quiet.”

The attacks began when a package bomb detonated on the porch of an Austin home, killing Anthony Stephan House, 39. That was followed 10 days later by two bombs that were found outside homes, one of which killed a 17-year-old man.

The first three bombs were apparently detonated when they were picked up or jostled. Later, on Sunday, a package bomb exploded in the Travis Country neighborhood, set off by the tripwire. The fifth explosion occurred at a FedEx center in Schertz, Tex., outside San Antonio on Tuesday. Another bomb, this one unexploded, was found at another FedEx facility in Austin the same day.

“We do not understand what motivated him to do what he did,” Chief Manley told reporters.

In a mere 19 days, the bombing sprees sparked fear across the Austin and San Antonio regions of Central Texas, evoking the nowhere-is-safe quality of the anthrax mailings of 2001 and the Washington sniper attacks of 2002. For a young man of 23 who did not complete a degree from Austin Community College, his devices and shifting methods as a serial bomber left some of the country’s most experienced federal explosives experts baffled early on in the investigation.

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And yet, that change in his tactics is largely what led police to him.

His first three bombs were hidden in packages that were not mailed but instead placed on people’s doorsteps. His fourth was set off using a tripwire across the Travis Country sidewalk. But his fifth was different — he shipped it from the FedEx store, which captured him on security video, wearing a baseball cap and a black T-shirt and standing at a counter, in addition to other surveillance video from the area. He shipped two package bombs there, and when one of them accidentally exploded at a FedEx center in Schertz, investigators traced the shipments back to the FedEx store, and, ultimately, to him.

After that explosion at the FedEx facility in Schertz, investigators had turned Mr. Conditt from a person of interest into the primary suspect. “Maybe for about 24 hours before his death, they were able to closely monitor him and his movements,” Gov. Greg Abbott told reporters.

Mr. Conditt’s vehicle was traced to a hotel in Round Rock, just north of Austin, Chief Manley said, where a SWAT team surreptitiously surrounded the hotel and called other specialized units.

But the suspect drove away before those teams could arrive. Officers followed the suspect, who stopped in a ditch off Interstate 35, and SWAT officers approached the vehicle on foot.

“The suspect detonated a bomb inside of the vehicle, knocking one officer back” and slightly injuring him, the police chief said. Another officer fired his gun at the vehicle. And investigators began the long process of trying to find the answer that wasn’t in the surveillance video: Why.

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