May 29, 2018

White House announces tech tariffs, investment restrictions on China

Photo: Brendan Smialowski/AFP/Getty Images

The White House announced this morning a plan to levy a 25% tariff on $50 billion worth of Chinese tech goods — with the exact list to be announced next month — as well as tech investment limits for Chinese nationals and entities. It also plans to pursue litigation at the World Trade Organization relating to Chinese intellectual property abuses.

The big picture: It’s a show of force that has surprised some sources close to the White House who believed Trump would defer any aggression towards China until after the North Korea summit.

  • A source close to the White House who has a keen understanding of the internal dynamics on China told me that this is an "initial move in a long negotiation that shows the Chinese Trump is very serious — and a move to balance the criticism that he was soft on ZTE.”

Another source close to the White House highlights these key takeaways:

  • This makes clear that investment restrictions, which were not vetted or ready at the time of the original announcement on tariffs, are part of the negotiating dance. In some ways, these are even more harmful to Chinese interests and a bigger deal in the negotiations than the tariffs.
  • The tariffs and the rest is what we already knew. What’s interesting is the timing. Trump is seeking to accelerate the negotiations even amidst the North Korea dance.

Worth noting: The White House statement provides timelines for announcing the final tariff list and investment restrictions, but it doesn’t give a hard timeline for their implementation. That gives Trump the flexibility to keep negotiating with the Chinese.

Go deeper: U.S. panics over China tech threat.

Go deeper

Scoop: Inside the Trump campaign's big hedge on Facebook

Illustration: Eniola Odetunde/Axios

The Trump campaign has invested most of its advertising budget to date on Facebook, testing thousands of versions of ads per day to maximize its spending.

But behind the scenes, a source familiar with the campaign tells Axios, the thinking has shifted: "As everyone can see, we still have strong spending on Facebook, but the percentage of our total media budget [on Facebook] is shrinking."

Trump's revenge tour has the House in its sights

Illustration: Aïda Amer/Axios. Photo: Saul Loeb/Getty Contributor

In the lead-up to the 2018 midterm elections — buoyed by Republican control of both chambers — President Trump viewed campaigning for the House as a lower-tier priority and instead poured his energy into rallying for the Senate.

But after the GOP reckoning in 2018, and experiencing firsthand how damaging a Democratic-led House has been to him, Trump is now personally invested in helping Republicans regain the majority in November, several people familiar with his thinking tell Axios.

Pelosi warns U.S. allies against working with China's Huawei

Nancy Pelosi, Feb. 16. Photo: Sven Hoppe/picture alliance via Getty Images

House Speaker Nancy Pelosi on Sunday cautioned U.S. allies against allowing Chinese telecommunications giant Huawei to develop their 5G networks, arguing at the Munich Security Conference that doing so is akin to “choosing autocracy over democracy," CNBC reports.

Why it matters: Pelosi's hawkish stance marks a rare area of agreement with the Trump administration, which believes Huawei is a national security threat because the Chinese government may be capable of accessing its equipment for espionage.

Go deeperArrow4 hours ago - World