AILSA CHANG, HOST:
President Trump today ordered stiff new tariffs on Chinese imports. A White House adviser says the president's goal is to shrink the U.S. trade deficit with China by at least $50 billion a year. The move marks a significant escalation of Trump's America First trade policy, and it prompted a nervous reaction on Wall Street today. The Dow Jones Industrial Average tumbled more than 700 points.
In a moment, we'll hear about how U.S. companies doing business in China feel about the president's action. But first we're joined by NPR's White House correspondent Scott Horsley. Hey, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ailsa.
CHANG: So why did the president take this action today?
HORSLEY: Well, U.S. businesses have complained for a long time about the way China treats their intellectual property. They say they're often forced to share their technology know-how as a price of doing business in China and that sometimes their tech secrets are stolen outright. Now, the White House says that the U.S. administrations have been trying to talk with China about that for years, going back to the George W. Bush administration, but that talk was not producing the desired change in Chinese behavior. So President Trump said this afternoon it's time to get tough.
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PRESIDENT DONALD TRUMP: We have a tremendous intellectual property theft situation going on, which likewise is hundreds of billions of dollars.
HORSLEY: Administration economists spent months studying this and came up with what they say is a conservative estimate that China's unfair practices of technology cost the U.S. economy some $50 billion a year. And so that's what they're trying to counteract with these tariffs. The president has directed his top trade negotiator to come up with a list of Chinese products to target over the next 15 days. And he's also directed the Treasury secretary to look at new limits on China's investment in the United States.
CHANG: We saw a really sharp sell-off on Wall Street today. I mean, it seems like investors are pretty worried about this move. Why is that?
HORSLEY: Yeah. It was a sharp sell-off. All the major market indices were down more than 2 percent. The Dow is off nearly 3 percent. You know, even though a lot of business people agree with the president that China needs to change its conduct, they're worried about this tariff tactic that the president is using. They say it's going to bring higher prices here in the U.S. and possible retaliation by China against U.S. exports. That's why you saw dozens of trade groups, including the Chamber of Commerce, the National Retail Federation, farm groups, writing the president last weekend, urging him not to impose tariffs.
And you've heard similar concerns from members of Congress, including the president's fellow Republicans. Here's Senator Orrin Hatch, who was speaking this week at a forum sponsored by the Business Roundtable as well as a farm group. He says the tariffs might backfire.
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ORRIN HATCH: Chinese companies don't pay U.S. tariffs. Rather American companies and American consumers get the bill. This is a tax hike, pure and simple.
HORSLEY: China was also quick to criticize the president's move. A statement from the Chinese embassy here in Washington said China does not want a trade war with anyone, but it will not recoil from one. It added, if a trade war is initiated, China would fight to the end to defend its own legitimate interests.
CHANG: Are there concerns beyond the economy?
HORSLEY: There are certainly strategic concerns. This is another case where the president is sort of acting on his own and runs the risk of alienating U.S. allies, even those who share his concerns about China's conduct. And also when it comes to North Korea, you know, Trump has been counting on support from Chinese President Xi Jinping, and he's been getting good cooperation. That's one reason he hasn't taken tough trade action until now. He now runs the risk of losing that cooperation as a result of this move.
CHANG: You know, this move is just the latest provocative trade move by the Trump administration. Just a couple weeks ago, the president ordered tariffs on imported steel and aluminum. What's happening with those?
HORSLEY: Yeah, those tariffs are due to take effect tomorrow, but they've been watered down a good deal. Canada and Mexico were already exempted. And today we learned that the administration is exempting the European Union, South Korea, Australia, Argentina and Brazil. So it's going to be interesting to see if something similar happens with the China tariffs over the next 15 days.
CHANG: That's NPR's Scott Horsley. Thanks, Scott.
HORSLEY: You're welcome.
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