Tariffs in U.S.-China trade spat used as bargaining chips: scholar

Taipei, The recent exchange of punitive tariffs by the United States and China is simply a tactic employed by each side to increase their respective bargaining chips, a Taiwanese scholar said Saturday.

Liu Meng-chun (???), director of the first research division of Taiwan's Chung-Hua Institution for Economic Research, said there is still room for negotiation between the two sides, even if the U.S. is ready to impose tariffs on US$50 billion worth of Chinese goods.

U.S. President Donald Trump announced on Friday that his administration will impose an additional 25 percent tariff on up to US$50 billion worth of Chinese goods, including machinery, robotics, aerospace items, information technology devices and auto products.

Liu said he believes the U.S. is not targeting consumer electronics products such as smartphones and TV sets even though they are the main drivers of the U.S. trade deficit because Trump is looking for a quid pro quo with China, as occurred in the ZTE case.

In April this year, U.S. companies were banned from exporting critical electronic components to Chinese telecommunications equipment maker ZTE, after it was caught illegally exporting U.S. technology to Iran and North Korea in violation of economic sanctions on those countries.

The ban subsequently left ZTE on the brink of collapse.

But earlier this month, the Trump administration announced it was lifting the ban on ZTE to save the jobs of the tens of thousands of Chinese workers at the company.

Many foreign reports suggested this was due to China's Ministry of Commerce approval of Qualcomm's US$44 billion acquisition of NXP Semiconductors, Liu said.

Liu said both sides are evidently still open for negotiations, adding that he does not think the U.S. will be willing to engage in all-out tariff war with China.

Source: Focus Taiwan News Channel