President Donald Trump’s announcement imposing tariffs of 25 percent on steel imports and 10 percent on imported aluminum is the first major economic policy error of his presidency.

What is the president’s motive? I firmly believe that Trump’s primary goal as president is to help American workers. Both his tax cut and his regulatory rollback were done for that reason, and workers are benefiting. By contrast, tariffs would not help workers but would cause other problems.

Let’s start with basic economics. A tariff is a tax on imports. That tax is paid by every American who buys the now-more-expensive product. A higher price for one good means less money to buy other goods. This is not a formula for prosperity.

Proponents of tariffs say, “Yes, American consumers have to pay higher prices, but American jobs will be saved.” That is incorrect. The problem isn’t just a tradeoff between American consumers and American workers.

Earlier tariffs on steel did, in fact, save jobs in the American steel-producing industry, but destroyed many more American jobs in steel-using industries. Tariffs don’t save American jobs; they merely redistribute where the jobs are lost.

One final comment on the economics of tariffs: In 1850, Frederic Bastiat wrote in his classic essay, “The Law,” that tariffs are a step toward socialism. In his words, “… protectionism, socialism, and communism are basically the same plant in three different stages of its growth.” All three call for government to intervene in the marketplace to influence who gains and who loses.

Now let’s look at the geopolitical implications of tariffs. The tariff proposals spooked the stock market. This surprised no one who knows history. In 1930, the stock market was recovering nicely from the 1929 crash until President Herbert Hoover signed the Smoot-Hawley Tariff Act. The stock market plunged, a trade war erupted, and the country slid into the Great Depression. At a minimum, implementing Trump’s tariffs could slow our economy; at worst, with retaliation from abroad, the tariffs could negate all the economic gains that Trump’s other policies have generated.

Some people defend the tariffs on the ground that something needs to be done in response to China’s abuses of trade. Indeed, the Chinese have been terrible global citizens. They cheat. Their government rejects free trade by subsidizing gross overproduction of steal and turning a blind eye to Chinese theft of American intellectual property.

If tariffs are to send a message to China, then Trump should have stipulated that the tariffs would apply only to China. Instead, he adopted a scorched-earth approach, saying that the tariffs would apply to every country.

Since Canada exports far more steel to the United States than China, it seems reckless and unfair to impose major pain on our friendly neighbors to the north if our goal is to rap China’s knuckles. More plausible is that the purpose of the tariff threat is to induce Canada to make concessions in the NAFTA negotiations.

Trump seems oblivious to the fact that international trade has had enormous economic benefits for Americans. Yes, some jobs are lost, but the overall increase of prosperity includes the creation of millions of new jobs. From 1945 to 2000, increased trade raised the average household income of Americans by $10,000 per year. In 2015, the Council of Economic Advisers reported that American consumers gain 29 percent of their purchasing power from trade.

Besides the faulty economics and risky geopolitics of the proposed tariffs, there is a third problematical aspect to Trump’s proposal. The Constitution of the United States gives Congress the prerogative “to regulate commerce with foreign nations” (Art. I, Sect. 8, para. 3). No president has constitutional authority to unilaterally impose tariffs.

Congress should resist this usurpation of power. And if that fails, the Supreme Court needs to uphold the Constitution.

RELATED: Dick Morris: Trump Is Doing It for Himself

Wouldn’t it be ironic if Trump-appointed Associate Justice Neil Gorsuch someday provides the decisive vote for the unconstitutionality of a policy instituted by the president who appointed him?

But let’s hope it doesn’t come to that. President Trump misfired on this issue. He should find other, more effective and less disruptive ways to boost the fortunes of America’s workers.

Dr. Mark W. Hendrickson is an adjunct faculty member, economist and fellow for economic and social policy with The Center for Vision & Values at Grove City College. A version of this article previously appeared on The Center for Vision & Values website.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by the owners of this website.

What do you think? Scroll down to comment below.</s>Image copyright Getty Images

A senior US official has said that the European Union (EU) and six other countries will be exempt from steel and aluminium tariffs announced by President Trump, at least temporarily.

Trade Representative Robert Lighthizer told a Senate panel that Mr Trump had decided to "pause" the import duties while further discussions took place.

The tariffs of 25% on steel and 10% on aluminium are due to come into effect on Friday.

The EU had argued it should be exempt.

Aside from the EU Mr Lighthizer said Argentina, Australia, Brazil, Canada, Mexico and South Korea would be exempted.

"The idea that the president has is that, based on a certain set of criteria, that some countries should get out," he told the Senate committee hearing.

"There are countries with whom we're negotiating and the question becomes the obvious one that you think, as a matter of business, how does this work?

"So what he has decided to do is to pause the imposition of the tariffs with respect to those countries."

Earlier this month, the EU's trade commissioner said the bloc would "stand up to the bullies" over protectionism.

Cecilia Malmström said protectionism was being "used as a weapon to threaten and intimidate us".

Analysis: By Kim Gittleson, New York business correspondent

In announcing exemptions for the European Union, Argentina, Australia, South Korea and Brazil, the Trump administration has effectively narrowed the countries that it is targeting with its protectionist trade policies. It also blunts the potential fallout to the US economy from the implementation of these trade barriers.

It pays to do some maths.

US imports of steel last year totalled $33bn.

But if the countries granted exemptions are removed from that total - including Canada and Mexico, whose exemptions had already been announced - then less than a third of US steel imports would be subject to tariffs.

This significantly lowers the potential economic impact of the tariffs - as well as the potential help it might provide to domestic steel industry here in the United States.

And it suggests that in steel tariffs, as with many policy actions the White House has taken, the reality of what is being done falls slightly short of the rhetoric.

Gareth Stace, a director with the trade association UK Steel, said the temporary exemption from tariffs would be "greeted with an enormous sigh of relief" by the UK's steel sector.

"It now provides us with the breathing room to find a more permanent solution.

"The alternative would be a severe curtailment of our ability to export to the US. With some 350,000 tonnes of steel sold to the US last year, 7% of our total exports, it is clear any tariffs would ultimately hit the sector hard," he added.

A UK government spokesperson said they welcomed the "signals" that the US government was considering EU wide exemptions for limited time period.

"The government will continue to work closely with the EU and the US Administration for a full exemption, and to ensure UK companies are not negatively impacted, either directly or indirectly.

"We remain concerned about the impact of these tariffs on global trade and will continue to work with the EU on a multilateral solution to the global problem of overcapacity, as well as to manage the impact on domestic markets."</s>President Trump will target up to $50 billion in Chinese imports with new tariffs.</s>WASHINGTON – President Donald Trump embarked Thursday on the sharpest trade confrontation with China in nearly a quarter-century, moving toward imposing tariffs on $60 billion in Chinese goods and limiting China’s freedom to invest in the U.S. technology industry.

The Chinese government fired back hours later, threatening to hit $3 billion in U.S. goods with tariffs. Trump’s announcement was “typical unilateralism and protectionism,” China’s Commerce Ministry said in a statement, and it had set a “very bad precedent.”

“China does not want to fight a trade war, but it is absolutely not afraid of a trade war,” it said in a statement issued Friday morning in Beijing. “We are confident and capable of meeting any challenge. It is hoped that the U.S. side will be able to make a swift decision and not to drag bilateral economic and trade relations into danger.”

Trump’s actions – which sent stocks to their biggest one-day drop in six weeks – followed a government finding that China had treated U.S. companies unfairly by coercing them into surrendering trade secrets for market access.

“We’re doing things for this country that should have been done for many, many years,” the president said at the White House.

Trump directed U.S. Trade Representative Robert Lighthizer to propose within 15 days tariff increases designed to compensate the United States for lost profits and jobs. After a comment period, the list, targeting Chinese products that benefited from U.S. technology, will be made public.

But even as he confronted China over technology, Trump weakened a new tariff meant to protect U.S. production of industrial metals, potentially exempting the European Union, Brazil and other countries accounting for two-thirds of steel imports and more than half of foreign-made aluminum.

By challenging China, Trump rejected the approach of his Republican and Democratic predecessors, gambling that China will bend before he does. “We don’t know how this is going to turn out,” said Scott Kennedy, director of the project on Chinese business at the Center for Strategic and International Studies. “It could be resolved in a few months, or it could spiral out of control into a broader strategic rivalry.”

Early reviews were not good. On Wall Street, the benchmark Dow Jones industrial average plunged more than 700 points, or almost 3 percent, as investors blanched at the prospect of a trade war between the world’s two largest economies.

“There’s a lot of concern about this administration’s shoot-first approach,” said Josh Bolten, president of the Business Roundtable. “The victims of the actions that the administration is proposing to take are principally Americans.”

Hours after Trump’s announcement, China’s commerce ministry gave the first indication of potential targets for retaliation, saying it had compiled a list of 120 products worth nearly $1 billion, including fresh fruit and wine, upon which it would impose a 15 percent tariff if the two countries fail to resolve their trade differences “within a stipulated time.”

The department did not specify a deadline and said that a 25 percent tariffs on other goods, including pork and aluminum, could be imposed “after further evaluating the impact of U.S. measures on China.”

Trump is betting that disrupting the traditional U.S. approach to China will yield a better commercial bargain for American businesses and workers than the status quo that he blames for hollowing out American industry.

Among U.S. politicians and business leaders, there is broad agreement that China has violated U.S. intellectual property rights through restrictive licensing arrangements in China and outright cybertheft in the United States.

But Thursday’s actions threaten to unravel global supply chains, increase costs for consumers and open the door to Chinese retaliation against U.S. farmers and businesses.

“The biggest and most powerful American companies are stuck in the middle,” said James McGregor, APCO Worldwide’s chairman for greater China. “They’re schizophrenic now. They don’t want today’s business to be eliminated. But they know China’s plan for tomorrow is to eliminate them in the Chinese market and then take them on globally.”

At $60 billion in affected products, Trump’s China actions carry a bigger punch than the tariffs on $46 billion in steel and aluminum imports that he announced March 8.

The impact of those earlier levies may shrink further: Lighthizer told the Senate Finance Committee on Thursday that products from the European Union, Australia, Argentina, South Korea and Brazil will not be affected when the tariffs go into effect on Friday while negotiations over potential exemptions continue.

Trump already had exempted Canada and Mexico from the import levies for the duration of talks aimed at renegotiating the North American Free Trade Agreement.

The United States last adopted this sort of uncompromising approach in a 1995 dispute over intellectual property rights. China ultimately acceded to U.S. demands, but today its economy is almost 17 times as big, making it less vulnerable to American pressure.

A Sino-U.S. trade war would affect economies that account for roughly 40 percent of global output, which explains the mounting apprehension on Wall Street.

“Trump’s economics team blew it,” economist Chris Rupkey of MUFG Union Bank wrote in a research note. “Tariffs mean a trade war and the news has the world’s investors running for the exits.”

The president blamed China for the loss of 60,000 factories and 6 million jobs, a number that most economists say blends the impact on U.S. employment of both Chinese competition and automation.

Trump said that unfair Chinese trade practices are responsible for the yawning U.S. trade deficit with China, which has reached a record $375 billion on his watch.

“Any way you look at it, it’s the largest of any country in the history of our world,” the president said. “It’s out of control.”

The White House expects the new taxes, which could reach up to 1,300 specific imports, will have a “minimal impact” upon consumers. But even business groups that support the goal of requiring changes in Chinese industrial policy voiced opposition to the tariffs.

“There is no way to impose $50 billion in tariffs on Chinese imports without it having a negative impact on American consumers. Make no mistake, these tariffs may be aimed at China, but the bill will be charged to American consumer who will pay more at the checkout for the items they shop for every day,” said Hun Quach, vice president for international trade at the Retail Industry Leaders Association.

Trump and his aides provided varying estimates of the value of the Chinese goods at issue. The president referred in his Roosevelt Room remarks to “about $60 billion,” while a senior White House aide who briefed reporters two hours before the president put the figure at “about $50 billion.”

The official cannot be identified under the ground rules for such White House briefings.

Trump also ordered Lighthizer to complain to the World Trade Organization about China’s discriminatory licensing practices for foreign companies, an effort that U.S. officials hope will draw support from American allies in Europe and Japan.

The president described the actions against China as part of a broader reappraisal of U.S. global relationships, featuring a willingness to use tariff threats to force concessions from trading partners.

“We will end up negotiating these things rather than fighting over them,” Commerce Secretary Wilbur Ross said, in an apparent reference to fears of a trade war.

The president also alluded to political calculations, saying that voter concerns over economic losses from bad trade deals was “maybe one of the main reasons” he won the White House.

Trump’s actions won plaudits from Democrats such as Sen. Sherrod Brown, Ohio.But they drew fire from the conservative National Taxpayers Union’s Bryan Riley, who called the proposed China tariffs “self-destructive and reckless.”

Under the measures targeting Beijing announced Thursday, Treasury Secretary Steven Mnuchin will draw up new investment restrictions to address concerns about Chinese investors, including state-sponsored investment funds acquiring U.S. companies to gain access to their technology.

“The end objective of this is to get China to modify its unfair trading practices,” said Everett Eissenstat, deputy assistant to the president for international economic affairs.

Since the president took office 14 months ago, his remarks on China have swung between effusive praise for Chinese President Xi Jinping and tough talk about its trade practices. In recent months, Trump has adopted an increasingly bellicose tone, with the White House billing Thursday’s actions as “targeting China’s economic aggression” and the president’s trade agenda released in February labeling the country a “hostile” economic power.

“China is engaged in practices which harm this country,” said Peter Navarro, director of the White House Office of Trade and Manufacturing Policy.

Trump’s trade moves potentially mark a sharp break with decades of growing U.S. economic engagement with China, which began in the late 1970s as the country emerged from Maoist autarky.

Years of commercial delegations and diplomatic dialogue saw trade between the two countries mushroom to $635 billion from $116 billion in 2000. Yet at the same time, U.S. companies complained about strict restraints on their operations in the Chinese market. Government regulations typically limited them to a minority stake alongside a local partner.

The administrations of George W. Bush and Barack Obama sought to persuade the Chinese to embrace more fully a market-oriented policy. Through 2013, when a high-level Communist Party conclave proclaimed a “decisive role” for the market and officials promised to pare back the state’s role in the economy, U.S. officials believed China was headed in the right direction.

Trump administration officials say that China’s economic policies are distorting global markets for key products such as steel and threaten to have the same effect on more advanced industries such as semiconductors and artificial intelligence.

“China benefits far more from the U.S.-China relationship than the U.S. does,” Navarro said.</s>President Donald Trump will impose tariffs on at least $50 billion in Chinese goods imports to retaliate against the alleged theft of American intellectual property, White House officials said Thursday.

Saying it would be the "first of many" trade actions, Trump signed the order that also will look at restrictions on Chinese investment in the US.

"We have a tremendous intellectual property theft situation going on," Trump said.

The new import duties will target industrial sectors where "China has sought to acquire an advantage through the unfair acquisition or forced technology transfer from US companies," senior White House economic advisor Everett Eissenstat told reporters.

The products subject to the new tariffs have not yet been identified.

But the move sent stocks diving on Wall Street, where the Dow Jones Industrial Average was down about two percent ahead of the announcement, and ratcheted up Trump's confrontational stance with trading partners.

Trump will direct US Trade Representative Robert Lighthizer to identify publish a proposed list of products that could be subject to tariffs.

He will also direct Lighthizer to take action against China at the World Trade Organization, charging Beijing with preventing US companies from licensing their technology in China.

The measure also directs the US Treasury to develop new proposals to increase safeguards on investments that could compromise US national security.

White House officials said Thursday the actions capped years of efforts to encourage China to end the alleged unfair practices through negotiations.

"Those dialogues failed under the Bush and Obama administrations," White House Trade Advisor Peter Navarro told reporters.

Navarro said Trump had been at pains to encourage Beijing to cooperate with American entreaties to open Chinese markets and end unfair practices.

"The problem is that with the Chinese in this case talk is not cheap, it's been very, very expensive and finally the president decided we needed to move forward."

As Trump has taken progressive steps toward confrontation, Beijing has repeatedly warned that trade wars benefited no one and that China would not stand idly by as Washington imposed punitive new measures.

American industry, and US agriculture in particular, have voiced exceptional concerns that Trump's moves could spark retaliatory measures and hurt US exporters.

But Navarro told reporters that China benefitted far more from trade relations with the United States than the reverse, meaning retaliation could be difficult for Beijing.

The new moves on China come weeks after the White House suddenly announced punishing new import tariffs on steel and aluminum, which have outraged trading partners and Republican lawmakers alike.

European officials this week have made high-level visits to press their case that they be excluded from the tariffs -- which are due to take effect on Friday.</s>China urges US to ‘pull back from brink’ as Trump unveils tariffs

China has drawn a list of 128 US products that could be hit with tariffs if the two countries are unable to reach an agreement on trade issues. — Reuters picBEIJING, March 23 — China urged the United States today to 'pull back from the brink' as President Donald Trump's plans for tariffs on up to US$60 billion (RM235.2 billion) in Chinese goods brought the world's two largest economies closer to a trade war.

The escalating tensions between Beijing and Washington sent shivers through financial markets as investors foresaw dire consequences for the global economy if trade barriers start going up.

Trump is planning to impose the tariffs over what his administration says is misappropriation of US intellectual property. A probe was launched last year under Section 301 of the 1974 US Trade Act.

“China doesn't hope to be in a trade war, but is not afraid of engaging in one,” the Chinese commerce ministry responded in a statement.

“China hopes the United States will pull back from the brink, make prudent decisions, and avoid dragging bilateral trade relations to a dangerous place.”

In a presidential memorandum signed by Trump yesterday, there will be a 30-day consultation period that only starts once a list of Chinese goods is published.

That effectively creates room for potential talks to address Trump's allegations on intellectual property theft and forced technology transfers.

Trump said he views the Chinese as “a friend,” and both sides are in the midst of negotiations.

Meantime, China showed readiness to retaliate by declaring plans to levy additional duties on up to US$3 billion of US imports including fresh fruit, wine and nuts in response to imports tariffs Trump announced earlier this month on steel and aluminium, which were due to go into effect today.

The inevitable fall in demand from a full-blown trade war would spell trouble for all the economies supplying the United States and China.

Feeling the chill, MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2.4 per cent, tracking a large overnight fall in Wall Street shares, but perceived safe havens such as government bonds gained.

“The upshot is that today's (US) tariffs amount to no more than a slap on the wrist for China,” Mark Williams, Chief Asia Economist at Capital Economics, wrote in a note. “China won't change its ways. Worries about escalation therefore won't go away.”

Williams estimated that the US$506 billion that China exported to the United States drove around 2.5 per cent of its total gross domestic product, and the US$50-60 billion targeted by the US tariffs contributed just around 0.25 per cent.

Trump, however, appears intent on fulfilling election campaign promises to reduce the record US trade deficit with China.

US multi-nationals at a business gathering in Shanghai were warned by Stephen Roach, a Yale University economist, “to prepare for the worst” and make contingencies until calmer heads prevail.

Roach said he could foresee “the Chinese government moving to restrict, in some form or another, the financial as well as the supply chain activities of American companies operating in this country.”

Alarm over Trump's protectionist leanings mounted earlier this month after he imposed hefty import tariffs on steel and aluminium under Section 232 of the 1962 US Trade Expansion Act, which allows safeguards based on "national security."

Today, Trump gave Canada, Mexico, Argentina, Australia, Brazil and South Korea and the European Union temporary exemptions. China was not exempted even though it was a far smaller supplier than Canada or South Korea.

Also omitted from the exemption list was US ally Japan, though a government spokesman said Tokyo would press to be included. And Finance Minister Taro Aso expressed empathy with Washington regarding the importance of protecting intellectual property.

China's retaliation against the US tariffs on steel and aluminium appeared restrained.

Targeting US$3 billion of US imports, China has drawn a list of 128 US products that could be hit with tariffs if the two countries are unable to reach an agreement on trade issues, the ministry said.

The commerce ministry said China was considering implementing measures in two stages: First the 15 per cent tariff on 120 products including steel pipes, dried fruit and wine worth $977 million, and later, the higher 25 per cent tariff on US$1.99 billion of pork and recycled aluminium.

US wine exports to China last year were US$79 million, according to data from the US Wine Institute, which represents Californian wine makers.

The fruit growers of California, Florida, Michigan and Washington all stood to lose as China's list also included close to 80 fruit and nut products. US exports of fruits, frozen juices and nuts to China amounted to US$669 million last year, and it was the top supplier of apples, cherries, walnuts and almonds.

“With the restrained response, China hopes Trump can realise his errors and mend his ways,” said Xu Hongcai, deputy chief economist at the China Centre for International Economic Exchanges, a Beijing think tank.

“If we really want to counter, the strongest response would be to target soybean and automobiles,” said Xu. “China is 'drawing its bow but not firing. We still have some cards to play.” — Reuters</s>Beijing has renewed a warning that it will retaliate if President Donald Trump goes through with plans to slap new tariffs on Chinese goods worth billions of dollars.

"China will certainly take all necessary measures to resolutely defend its legitimate rights and interests," if the United States imposes new restrictions, the Ministry of Commerce said in a statement on Thursday.

Trump is widely expected to announce new tariffs on $60 billion worth of Chinese exports to the United States later in the day. That's a little more than 10% of all Chinese goods sent to the United States in 2017.

Related: Why Trump's tariffs on China are a big deal

Trump has repeatedly accused Beijing of unfair trade practices like currency manipulation -- which helps China make its exports more affordable -- and of stealing US intellectual property. The president has frequently taken aim at China's huge goods trade surplus with the United States, which reached $375 billion last year.

The tariffs would be the first time the Trump administration has directly targeted China with big trade sanctions. Previous measures against steel, aluminum and solar panels have applied to imports from other countries too.

China has repeatedly said that it doesn't want a trade war but warned that it would take "firm and necessary" countermeasures if necessary.

"It's unrealistic and unreasonable to demand complete equality in trade," Chinese foreign ministry spokeswoman Hua Chunying told reporters on Thursday. "We hope that both sides can sit down and talk calmly."

Beijing hasn't offered any specifics on how it could respond, but it does have a number of options.

Related: Major retailers to Trump: New China tariffs will hurt American shoppers

For example, it is one of the biggest buyers of US crops, including soybeans or sorghum. China could put a tariff on those, or decide to buy more soy from places like Brazil and Argentina.

Boeing (BA) might also be vulnerable in the longer term. It's the single largest US exporter, and China is a critical market for the company. Chinese airlines could place more orders for Airbus (EADSF) planes in future.

China is also the biggest creditor of the United States: It owns more US government bonds than any other country. It recently cut some of its US debt holdings, though investors don't expect China to immediately dump its US debt.

China's Global Times, a state tabloid that often voices nationalist views, said in an editorial this week that any suggestion China would suffer more than the United States in a trade war was "arrogant and naïve."

It pointed to soybeans as one area where it could put the squeeze on US exporters.

"If China halves the proportion of the US soybean imports, it will not have any major impact on China, but the US bean farmers will complain. They were mostly Trump supporters. Let them confront Trump," the newspaper said.</s>WASHINGTON (Reuters) - U.S. President Donald Trump lit a slow-burning fuse on Thursday to launch long-promised anti-China tariffs, but his actions appeared to be more of a warning shot than the start of a full-blown trade war with Beijing.

A presidential memorandum signed by Trump will target up to $60 billion in Chinese goods with tariffs over what his administration says is misappropriation of U.S. intellectual property, but only after a 30-day consultation period that starts once a list is published.

Trump gave the Treasury Department 60 days to develop investment restrictions aimed at preventing Chinese-controlled companies and funds from acquiring U.S. firms with sensitive technologies.

The waiting periods will give industry lobbyists and U.S. lawmakers a chance to water down a proposed target list that runs to 1,300 products, many in technology sectors.

It also will create space for potential negotiations for Beijing to address Trump's allegations on intellectual property and delay the start of immediate retaliation against U.S. products from aircraft to soybeans.

"I view them as a friend" Trump said of the Chinese as he started his announcement. "We have spoken to China and we are in the middle of negotiations."

But his actions provoked a belligerent response from China's embassy in Washington, which vowed Beijing would "fight to the end" in any trade war with the United States.

"We will retaliate. If people want to play tough, we will play tough with them and see who will last longer," Chinese ambassador Cui Tiankai said in a video posted to the embassy's Facebook page.

Stocks fell sharply on Trump's announcement, with the Dow Jones Industrial Average <.DJI> falling nearly 3 percent. Major industrials that could become targets of Chinese trade retaliation slumped further, with aircraft maker Boeing <BA.N> down 5.2 percent and earthmoving equipment maker Caterpillar <CAT.N> falling 5.7 percent.

In addition to punitive tariffs, Trump's memo also directed U.S. Trade Representative Robert Lighthizer to challenge China's technology licensing programs at the World Trade Organization. The WTO has repeatedly drawn the ire of the administration but it could provide a resolution that avoids a trade war.

The steps are based on the results of USTR's eight-month investigation of suspected misappropriation of American technology by China.

U.S. officials say that probe, undertaken through Section 301 of the 1974 Trade Act, has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.

Trump, who earlier this month announced steep tariffs on steel and aluminum imports to the United States, also wants the Chinese to take action that would lower the $375 billion goods trade deficit that the United States is running with China.

White House officials told a briefing ahead of the trade announcement that the administration was eyeing tariffs on $50 billion in Chinese goods. They said the figure was based on a calculation of the impact on the profits of U.S. companies that had been forced to hand over intellectual property as the price of doing business in China.

There was no explanation of the difference between that figure and Trump's $60 billion.

"Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from U.S. companies," said Everett Eissenstat, deputy director of the National Economic Council.

In addition, Trump will also direct the U.S. Treasury to propose measures that could restrict Chinese investments in the United States, Eissenstat said.

China has threatened to target U.S. exports of agricultural commodities, in particular the $14 billion in exports of soybeans.

Reaction from U.S. industry groups sought to strike a balance, applauding the president for tackling the persistent drain of U.S. technology to Chinese competitors, but urging negotiations instead of tariffs.

"American business wants to see solutions to these problems, not just sanctions such as unilateral tariffs that may do more harm than good," said John Frisbie, president of the US-China Business Council.

Despite threats of retaliation, China has been keen to portray itself as a defender of globalization, a message that was reinforced in a call between President Xi Jinping and French President Emmanuel Macron.

That said, there is a risk of a mounting cycle of retaliation. U.S. Trade Representative Lighthizer warned on Wednesday that Washington would take "counter measures" if Beijing targeted U.S. agriculture.

The biggest risk to world trade over the longer term may not be a tit-for-tat trade war, but the breakdown of global supply chains that feed companies such as U.S. auto giant General Motors Co <GM.N> and Apple Inc <AAPL.O>.

"Tensions are likely to escalate further, even without a full-scale trade war. This could disrupt global supply chains and damage investor sentiment," said Dario Perkins, head of global macroeconomics research at TS Lombard, a London-based economic consultancy.

Trump's steel and aluminum tariffs, which are tied to Section 232 of the 1962 Trade Expansion Act, go into effect on Friday. Canada and Mexico have been given initial exemptions from the 25 percent steel and 10 percent aluminum tariffs.

Lighthizer told U.S. lawmakers on Thursday that the European Union, along with Argentina, Australia, Brazil and South Korea, would also be exempted.</s>President Donald Trump launched the next salvo in his widening war on Chinese trade abuses, this time taking aim at China's unfair seizure of US intellectual property.

Trump on Thursday directed the US trade representative to level tariffs on about $50 billion worth of Chinese imports following a seven-month investigation into the intellectual property theft, which has been a longstanding point of contention in US-China trade relations. In addition to the tariffs, the US also plans to impose new investment restrictions, take action against China at the World Trade Organization and the Treasury Department also will propose additional measures.

"We have a tremendous intellectual property theft problem," Trump said. "It's going to make us a much stronger, much richer nation."

The move, which comes on the heels of the administration's steel and aluminum tariffs that also took aim at China, has already been met with threats of retaliation from China and is heightening concerns of a global trade war that could destabilize the global economy -- fears the Trump administration has repeatedly brushed off.

Trump on Thursday signed a memorandum announcing the trade actions, invoking Section 301 of the 1974 Trade Act, which formed the basis for the administration's investigation.

Before signing the measure, Trump lamented the US' multi-hundred billion dollar trade deficit with China and said the action would be "the first of many."

Trump prefaced his trade action by insisting he views China as a "friend" and said he has "tremendous respect" for Chinese President Xi Jinping, as he flicked to China's support in pressuring North Korea to denuclearize.

"They are helping us a lot in North Korea," Trump said. "But we have a trade deficit ... there are many different ways of looking at it, but no matter which way you look at it, it is the largest trade deficit of any country in the history of the world."

Trump said the US would continue to engage diplomatically with China to reduce the trade imbalance, even as he signed an action that is likely to exacerbate tensions between the two countries.

Robert Lighthizer, the US trade representative, said the tariffs would focus on theft of US technologies and said Trump "concluded that we should put in place tariffs on appropriate products" following the investigation.

"This is an extremely important action. Very significant and very important for the future of the country, really across industries," Lighthizer said.

The investigation concluded that China has stolen or coerced US companies into turning over their intellectual property through a series of state-run structural maneuvers, including its requirement that foreign companies partner with Chinese companies to access the Chinese market, said Everett Eissenstat, the deputy director of the National Economic Council for international economic affairs.

The investigation also assessed that China has stolen US intellectual property by hacking US computer networks, though senior administration officials said Thursday's tariffs would not account for the value of that intellectual property theft, which they estimated to be in the hundreds of billions of dollars.

The incoming tariffs are the most significant to date from a President who campaigned on a promise to correct the US' global trade imbalance, particularly with China, and to revitalize US manufacturing. The move is just the latest sign that Trump is intent on putting his protectionist rhetoric into action despite concerns from economists and financial analysts, including within his own administration.

Beyond the threat of a far-reaching trade war, economists have warned US consumers are likely to bear the cost of the tariffs and worries about Chinese retaliation are mounting.

"A trade war does no good to anyone. There is no winner," China's Premier Li Keqiang said at a news conference in Beijing in anticipation of the Trump administration's tariff action.

The Trump administration, though, has said it is simply taking long-overdue action following years of unfair Chinese trading practices that they argue previous administrations have insufficiently countered.

Peter Navarro, Trump's hawkish top trade adviser, said the administration had decided on the tariffs in lockstep and said the US opted to take tariff actions after dialogues with China over the last 15 years have failed to produce significant changes in Chinese behavior.

"Administrations before us and this administration has tried very, very hard to work with the Chinese," Navarro said. "Talk is not cheap. It has been very expensive to the American people."

The tariffs will not take immediate effect. Instead, the US trade representative will publish a list of targeted goods within 15 days and will then allow for a 30-day public comment period.

Pressed about the impact on US consumers, a senior administration official said the administration believed the tariffs would result in only "minimal effects" on US consumers.

"In terms of the broader calculus of the harm that is done by what is the theft ... of intellectual property is almost incalculable," the official said.</s>The Trump administration will impose about $60 billion in new trade penalties against China, the first targeted trade measures aimed directly at Chinese “economic aggression.”

“We have a tremendous intellectual property theft situation going on,” President Donald Trump said Thursday, revealing that he has spoken with Chinese leadership about this issue and the “out of control” trade deficit.

The U.S. is preparing to take punitive action against China to the tune of tens of billions of dollars.

“This is just a fraction of what we’re talking about,” the president added, announcing that he has asked China to take steps to reduce the trade deficit by $100 billion or more. Trump said the U.S. is having “very large negotiations” with China on trade.

U.S Trade Representative Robert Lighthizer launched an important investigation of China under Section 301 of the Trade Act of 1974 last August looking “into Chinese laws, policies, and practices which may be harming American intellectual property rights, innovation, or technology development.”

“We are losing to China,” Lighthizer told lawmakers Wednesday. “We have a very serious problem of losing our intellectual property.”

Secretary of Commerce Wilbur Ross estimates that intellectual property theft and forced technology transfers cost the U.S. several hundred billion dollars annually, and China is generally considered to be the most serious offender.

“The era of American economic surrender is over,” Vice President Mike Pence said Thursday.

In addition to tariffs, the U.S. is also blocking certain Chinese investments.

White House Trade Adviser Peter Navarro stressed Thursday that dialogue with China has failed to produce desirable results.

“The problem is with the Chinese, talk is not cheap, it’s very expensive,” he argued.

The White House argues that every one billion dollars of the $375 billion costs the U.S. 6,000 jobs.

Beijing has already signaled that it may retaliate against punitive U.S. trade measures.

China “has expressed its position on many occasions that we resolutely oppose this type of unilateral and protectionist action by the U.S. China will not sit idly by while legitimate rights and interests are hurt. We must take all necessary measures to firmly defend our rights and interests,” the Chinese Ministry of Commerce said Thursday.

“China will have a choice of how to respond. They have benefited far more from this relationship than we have and they will take that into account,” a White House official revealed.

China is believed to be preparing its own penalties in response.

A version of this article appeared on The Daily Caller News Foundation website.

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U.S. Trade Representative Robert Lighthizer tells a Senate panel that President Donald Trump has decided to "pause" tariffs on steel and aluminium imports from the European Union, Argentina, Australia, Brazil, Canada, Mexico, and South Korea.