As Trump Escalates Trade War, U.S. and China Move Further Apart With No End in Sight – The New York Times

The Trump administration continues to look for other ways to limit the ability of American companies to do business with China. The Commerce Department is moving forward with new export controls that would restrict American firms from selling sensitive technology, like artificial intelligence and quantum computing, to Chinese firms. And it has blacklisted several Chinese technology companies, including the telecom giant Huawei, from buying sensitive American technology.

“We’ve never seen anyone do what President Trump has done,” said Chad P. Bown, a senior fellow at the Peterson Institute for International Economics. “It looks more and more like this is the new normal.”

Mr. Bown’s research shows that the trade war is entering a period of rapid escalation. Tariffs between the United States and China remained roughly constant from October 2018 to the middle of this year. But after talks between the two sides collapsed in May, the president set into motion a series of increases that will raise American tariffs on China by about 12 percentage points in six months, and will ultimately tax the vast majority of goods China sends to the United States. China, in response, has raised tariffs on $75 billion worth of American products and halted purchases of farm products.

“The trade war has been kind of on a slow burn for a while, but things are now really ramping up in a hurry,” Mr. Bown said.

On Sunday, China began charging a 33 percent tariff on American soybeans, compared with just 3 percent for those coming from Brazil or Argentina, Mr. Bown says. On Dec. 15, China will start taxing American autos and auto parts at a 42.6 percent rate, compared with 12.6 percent for those from Germany or Japan.

Those barriers are quickly reconfiguring the global economy. American imports from China fell by 12 percent in the first half of the year, while exports to China dropped 19 percent. Chinese trade with other countries has increased, offsetting some of that fall from the United States.

Some major multinational companies have announced in recent days that they are trying to quickly reduce their reliance on China. The toymaker Hasbro and clothing retailers like Express and Abercrombie & Fitch have said they will shift their supply chains to emerging manufacturing hubs in Vietnam, India, and elsewhere. Some of that shift was already underway, given China’s rising wages, but the trade war has made that move financially imperative.