The possibility of new tariffs on China, and even the cancellation of its preferential trade status with the US, will come under the microscope of President Donald Trump’s two-day-old “America First Trade Policy”, according to analysts who say the likelihood of such a review also raises the question of whether Beijing may have to fulfil the missed requirements of a trade deal reached with Washington in 2020.
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The policy was formalised in a memorandum after Trump’s inauguration on Monday. Describing it as “rather hawkish” on China, analysts with Tokyo-based bank Nomura on Tuesday flagged concerns related to the Office of the US Trade Representative’s planned assessment of China’s compliance with the phase-one trade deal.
“The concern here is that this gives the Trump administration another reason to impose additional stiff tariffs or trade demands on China to force compliance with the original trade deal,” analysts led by Craig Chan said in the research note.
Other sections of the memo call for investigating the US’ large trade deficit with China, the overall US tariff regime, China’s currency-management practices, and US investments in sensitive technologies from a national security perspective.
Nomura calculated that, in 2020 and 2021, China reached only about 58 per cent of an import target in the deal, which was signed during Trump’s first term after the two countries slapped several rounds of tariffs on each other.
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