Trump wants to create a “retaliation alliance” against China. Members can take tariff measures against China.
According to the report “The White House Considers New Actions in Beijing” on November 23, Trump administration officials said that the most ambitious action of the United States will be to create an informal alliance of Western countries to use it in China. When its trade strength comes to joint retaliation. Under this joint retaliation plan, when China boycotts imports from the relevant countries, the allied Western countries will agree to purchase the relevant goods or provide compensation.
According to the report, as US President Trump spent the last two months of his term, senior government officials said they were pushing for new tough measures against Beijing.
According to reports, Trump administration officials said that the most ambitious action of the United States would be to create an informal alliance of Western countries to jointly take revenge when China uses its trade power. They said that the plan was triggered by China’s economic pressure on Australia after Australia called for an investigation into the source of the COVID-19 epidemic.
Under this joint retaliation plan, when China boycotts imports from the relevant countries, the allied Western countries will agree to purchase the relevant goods or provide compensation. Alternatively, the alliance could agree to consider tariff measures against China to compensate for trade losses.
According to the report, the Trump administration is also considering expanding the ban on imports from Xinjiang, China, and blacklisting some companies, including SMIC, a Chinese chip manufacturer, in the U.S. Department of Commerce. At present, SMIC International is already facing strict licensing requirements when purchasing from American companies.
The above-mentioned senior U.S. officials admitted that these new measures face the obstacle of the Trump administration’s fading. If these measures succeed in overcoming the barrier, they will also need the incoming Biden administration to support and advance this effort.
In addition, it is far from certain whether other countries want to join an organization aimed at binding Beijing, or an organization that may rely on tariff measures, which will hurt domestic consumers, while relying on Chinese trade. The above-mentioned U.S. officials claimed that they were in contact with Western democracies, but did not disclose which countries.
According to the report, a spokesman for U.S. President-elect Biden declined to comment on these possible new actions against China.
One of the issues that Trump’s national security team needs to address is whether joint action will violate WTO rules, according to the report. They said that it would not work to complain to the WTO, because such a complaint will take many years to resolve.
Stephen Kirkner, director of the Trade and Investment Program of the American Research Center of the University of Sydney, said that it is difficult to see that the United States and its allies will buy all the products previously exported to China.
He said: “I don’t think the United States and the relevant allied countries really intend to let the government order the private sector to carry out relevant procurement. In this way, you have to choose to adopt tariff measures, which is somewhat counterproductive, because tariff measures will only increase the cost of the allied countries.