Looming Trade War Poses Real Challenges if Tariffs Kick in

Markets continue to hunker down amid little news of any breakthrough in the tit-for-tat tariff battle that threatens to become an all-out trade war amid President Trump’s threats to impose tariffs on up to $450 billion in Chinese imports.

China’s highly publicized “Made in China 2025” outlines a state-backed industrial policy targeting 10 sectors in technology that include aerospace, advanced materials, clean energy and robotics, among other software advances like artificial intelligence. This ambitious program has Washington’s trade officials on full alert.

Made in China 2025 is at the heart of China’s efforts to capture 70% of market share by 2025 for basic core components and important basic materials in strategic industries. President Trump’s initial list of tariffs on $50 billion in Chinese goods, which will begin taking effect on July 6, specifically targets items related to Made in China 2025.

Peter Navarro, the president’s key trade advisor, argues that the Chinese government plans to dominate emerging technology industries. “China seeks to achieve its goal of economic and military domination, in part, by acquiring the best American technology and intellectual property,” he wrote, concluding that “Trump’s new tariffs will provide a critical shield against this aggression.”

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