The United States has launched Section 301 investigations into alleged unfair trade practices by China and other economies, potentially allowing higher tariffs to be reimposed, but analysts describe it as a 'bluff' to gain leverage for President Trump's expected trip to China. Beijing, accustomed to such tactics, is unlikely to be fazed.
The United States has decided to launch Section 301 investigations into alleged unfair trade practices by China and several other economies, a move that could pave the way for Washington to reimpose higher tariffs. Analysts say this is a 'bluff' by US President Donald Trump to create perceived leverage ahead of his expected trip to China, aimed at appealing to his domestic base before the midterm elections.
Fu Weigang, president of the Shanghai Institute of Finance and Law, a private think tank, said: 'Trump’s move before his China trip is calculated to appeal to his domestic base ahead of the midterm elections with the message: “I’m going to Beijing with investigations and leverage and won’t compromise.”' He added: 'China knows this is a result of US domestic politics, so it’s no surprise. Chinese exporters have been on the receiving end of such tactics for years, but they have become more resilient.'
The investigations target China, Japan, the European Union, India, and Mexico. Beijing has grown accustomed to Trump's 'art of the deal' tactics, and analysts believe the threat is unlikely to faze it. Trump's visit will be the first by a US president to China in nearly a decade, featuring a summit with President Xi Jinping, with focuses on a potential trade truce and investment revival.
External factors like the situation in Iran are influencing security arrangements, with the trip expected to be confined to Beijing. Reports indicate that the US and China are discussing ways to revive investment, including structured joint ventures and licensing deals, as Beijing seeks protections and Washington aims for better market access.
