Trade relations between the U.S. and China continue to be strained and seemingly getting a bit worse. The threat and possibility of a new Trump administration, new legislation concerning a possible mandated forced sale of TikTox, new U.S. subsidies to the Chip industry, and litigation concerning the solar imports — all contribute to a nasty trade environment. Here are a few quotes from recent news accounts ………….

• “TikTok filed its suit in the U.S. Court of Appeals for the District of Columbia Circuit, arguing that selling its U.S. operations was not commercially, technologically, or legally feasible …. National security concerns about TikTok are speculative and fall short of what’s required to justify violating First Amendment rights …. Fears of a potential security threat from TikTok have escalated in the last year and a half, prompting bans of the app on federal devices and those issued by some city and state governments.” “TikTok Sues U.S. Government.” New York Times (May 8, 2024). 

• “Donald Trump’s economic advisers are eyeing aggressive new legal justifications to impose tariffs on all imports …. But the Constitution gives power over both taxation and regulation of foreign commerce to Congress, which complicates the extent to which the president can impose tariffs through executive action …. In addition to the 10 percent “universal” tariff, Trump has proposed pushing import duties on China as high as 60 percent …. One option, based on a 1977 law, gives the president power over international commerce if the chief executive determines the existence of an “unusual and extraordinary threat” to national security, the economy or foreign policy ….  The other option is a 1930 law that allows presidents to impose duties on countries that “have discriminated against the commerce of the United States.” …. A third option is to cite a 1974 law that gives the executive branch authority to act in retaliation against foreign trade practices, which was the power Trump relied on for tariffs against China in his first term.” “Plans to Muscle Up for a Global Trade War.” Washington Post (May 8^th, 2024).

• America’s collective national body is suffering from a chronic case of China anxiety …. Congress has moved to force the sale of TikTok, the Chinese-owned social media application; some states have sought restrictions on Chinese individuals or entities owning U.S. land and on Chinese researchers working in American universities; and the federal government has barred certain Chinese technology firms from competing in our markets. These measures all have a national security rationale …. Chinese students are questioned and researchers traveling to and from China on the grounds that they may be agents of the Chinese state ….  If the United States is to properly compete with China, it’s going to require healthy, balanced policymaking that protects U.S. national security. “Take a Deep Breath About China.” New York Times (May 6, 2024).

• “The economic cost to Beijing of Trump’s tariffs, retained by Biden, is real. Chinese companies slapped with tariffs exported less to the U.S. …. The damage to China’s gross domestic product from the trade war was three times as high as the hit to the U.S. …. Trump has said that if re-elected, he might impose tariffs of up to 60% on imports from China.”  “Rematch of Trump vs. China.” Wall Street Journal (May 2, 2024).

• “Biden’s signing of the law started a 270-day clock, which could extend to a full year, during which the government has ordered TikTok to be sold to a non-Chinese buyer. If ByteDance does not divest by then, the administration said it would work to block TikTok from Apple’s and Google’s app stores …. But the law could be weakened by the fact that the United States does not ban foreign ownership of U.S. media companies. The Federal Communications Commission voted in 2013 to relax its long-standing rule concerning foreign investment in radio and TV …. Trump’s effort to ban the app in 2020 was overturned by federal judges who said the government had not shown sufficient proof of harm to justify violating Americans’ speech freedoms. Montana’s statewide TikTok ban was halted last year by a federal judge who said it carried a pervasive undertone of anti-Chinese sentiment and violated the Constitution in more ways than one.” “TixTox and Legal War.” Washington Post (April 28, 2024).

• “With recent multi-billion-dollar grants to Intel, TSMC, Samsung, and Micron, the US government has now spent over half its $39bn in Chips Act incentives …. Production would be roughly enough for the needs of critical infrastructure like datacenters and telecoms …. Japan and Europe are investing in foundational chip capacity …. Critics worry all these incentives create a subsidy race — but this began well before the Chips Act. A 2019 OECD study found that between 2014 and 2018 at least two US companies received more money from a foreign government than from the US …. Equity investors will debate whether these new investments can deliver an adequate financial return. Policymakers who see the Chips Act as an insurance policy against geopolitical shocks believe it is already paying dividends.” “Success of CHIP Act.” Financial Times (April 26, 2024).

• “The Biden administration has used the Inflation Reduction Act and other policies to try to revive the U.S. solar manufacturing industry. That has spurred more manufacturing of solar panels …. A group of solar manufacturers have petitioned the U.S. International Trade Commission and the Department of Commerce to investigate potentially illegal trade practices by Cambodia, Malaysia, Thailand and Vietnam and impose higher tariffs on products they export to the United States. The complaint focuses on companies that have their headquarters in China …. In addition to the allegations in the petition, solar manufacturers have raised concerns about the use of forced labor in production of polysilicon in China and other Southeast Asian countries.”  “Solar Panels & U.S. Manufacturing.” New York Times (April 24, 2024).