According to a report from The Wall Street Journal, President Trump is planning to impose additional restrictions on China companies that are using the U.S. tech. It is said that investing in the U.S. technology will be blocked and that Chinese companies will be prevented to further use it in some sectors.
It is clear that Beijing wants to become the leader in technology, and their Made in China 2025 initiative is seen as a threat by POTUS. The two measures that are coming should be presented in the next few days, further pushing this trade war of two countries.
At the moment, the Treasury Department is working on the way to block companies, that are supported by Chinese capital and of which they hold more than 25%, in buying “industrially significant technology.” Reuters reported that such measures will be implemented but also that there could be a change in the percent of ownership that will be allowed.
This is not all as the National Security Council, together with the Commerce Department, is going to implement additional export controls that will prevent “industrially significant technology” exports to China. As a result of the article delivered by WSJ, the U.S. stock futures were down by about 0.5%. Unfortunately, we couldn’t get any confirmations from the White House or the Treasury Department regarding the new measures.
In the last few weeks, many issues have surfaced regarding trade between the two largest world’s economies. The U.S. has prepared $34 billion in tariffs on some China’s products, and those should be implemented on July 6. Beijing will not just sit and watch someone trying to destroy their economy, retaliatory measures are expected, and some U.S. imports will be hit.
Initially, on June 15, it was planned for 25 percent tariff to be imposed on about $50 billion of Chinese products. Soon after that, Trump commanded the United States Trade Representative to bring him a $200 billion goods list that could be hit with a 10% tariffs. It was said by China’s Commerce Ministry that they would respond accordingly to moves like this.