Donald Trump veers into ‘uncharted trade territory’

Bloomberg

The Trump administration is under growing pressure to explain the details of its trade policies after fears of a tit-for-tat economic conflict between the US and China sent stocks tumbling.
Businesses and investors are awaiting details in the coming days of the proposed product list for the tariffs on roughly $50 billion in Chinese imports President Donald Trump announced. While US stocks fell sharply after Trump unveiled the plan, equity futures rallied today as investors’ immediate fears appeared to ease.
China unveiled tariffs on $3 billion of US imports in response to separate US steel and aluminum tariffs, and its ambassador to the US said all options are on the table, though the Asian nation doesn’t want a trade war.
“There remains a huge amount of uncertainty over what happens next,” Capital Economics analysts said in a research note. “But with the protectionists seemingly in the ascendancy in the White House, the possibility of further escalation is high.”
Trump has also tasked Treasury Secretary Steven Mnuchin with imposing new curbs on Chinese investment in the US. The president laid out the plan after the US Trade Representative’s office concluded Beijing violates US intellectual property in myriad ways, such as by forcing American companies to cough up technology to do business in China.
Meanwhile, the US is still negotiating with the European Union, Argentina, Australia, Brazil, Canada, Mexico and South Korea on whether those countries will be subject to steel tariffs. The White House announced last week the nations would be excluded until May 1.
The US is scheduled to resume talks with Canada and Mexico early next month on an overhaul to the North American Free Trade Agreement, adding another potential flash point.
Amid the tumult, the administration is sending mixed signals about how far it is willing to go. Just before the China tariffs were announced, White House trade adviser Peter Navarro signaled a break from the diplomatic approach toward China that has defined US economic policy since Richard Nixon visited the Communist nation in 1972.
But Mnuchin said he’s optimistic the US can reach an agreement with China that will forestall the need to impose the tariffs that Trump has ordered.
“We’re having very productive conversations with them,” Mnuchin told “Fox News Sunday.” “I’m cautiously hopeful we reach an agreement.”