President Xi Jinping and President Trump outside the Great Hall of the People in Beijing in November 2017. Photo: Artyom Ivanov / TASS via Getty Images

The Trump administration announced today a plan to levy investment restrictions and roughly $60 billion worth of tariffs on China in response to its widespread violation of U.S. intellectual property rights. The message to Beijing is clear: Washington will no longer overlook China’s systematic efforts to acquire American technology.

Why it matters: These economic policies mark the dawn of a new era in U.S.–China relations. Though once a source of stability between the world's two most powerful nations, commerce and investment will from now on be a flashpoint.

The big picture: Beijing pursues U.S. technology by extracting intellectual property from U.S. firms operating in China, investing in American companies and startups, and opening research centers in the U.S. to tap American talent. While the tariffs might compel China to improve its domestic treatment of American firms, they leave most of China's practices unaffected. Limitations on Chinese investment in the U.S. — if carefully scoped and adaptable to Beijing’s evolving toolkit — would do more.

The risks: As the Trump administration seeks to secure U.S. technology against China, it must avoid making three mistakes:

  1. Playing domestic politics by declaring victory after Beijing makes token concessions
  2. Undermining the openness that underpins U.S. economic dynamism by using a political meat ax instead of a scalpel
  3. Failing to work with U.S. allies to develop common Chinese investment screening procedures that would ward off predatory practices

[UNSUPPORTED BLOCK TYPE: axiom]

Daniel Kliman is a senior fellow in the Asia-Pacific Security Program at the Center for a New American Security.

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Americans feel Trump's sickness makes him harder to trustFlorida breaks record for in-person early voting — McConnell urges White House not to strike stimulus deal before election — Republican senators defend Fauci as Trump escalates attacks.
  2. Health: The next wave is gaining steam.
  3. Education: Schools haven't become hotspots — University of Michigan students ordered to shelter-in-place.
  4. World: Ireland moving back into lockdown — Argentina becomes 5th country to report 1 million infections.

Report: Goldman to settle DOJ probe into Malaysia's 1MDB for over $2B

Illustration: Lazaro Gamio/Axios

Goldman Sachs has agreed with the Department of Justice to pay over $2 billion for the bank's role in Malaysia's multi-billion dollar scandal at state fund 1MDB, Bloomberg first reported.

Why it matters: The settlement, expected to be announced within days, would allow Goldman Sachs to avoid a criminal conviction in the U.S. over the bribery and money laundering scandal that saw three of its former bankers banned for life from the banking industry by the Federal Reserve Board.

Trump threatens to post "60 Minutes" interview early after reportedly walking out

Trump speaks to reporters aboard Air Force One, Oct. 19. Photo: Mandel Ngan/AFP via Getty Images

President Trump tweeted on Tuesday that he was considering posting his interview with CBS' "60 Minutes" prior to airtime in order to show "what a FAKE and BIASED interview" it was, following reports that he abruptly ended the interview after 45 minutes of taping.

Why it matters: Trump has escalated his war on the media in the final stretch of his re-election campaign, calling a Reuters reporter a "criminal" this week for not reporting on corruption allegations about Hunter Biden and disparaging CNN as "dumb b*stards" for the network's ongoing coronavirus coverage.