Donald Trump prepares to sanction China as trade war escalates

Simmering tensions between the US and China over trade could come to the boil this week if Donald Trump imposes sanctions, leading to a “potentially disastrous trade conflict”, warns The Daily Telegraph.

Two inquiries by the US Commerce Department, due to report to the White House this week, could open the door for punitive measures against Chinese steel and aluminium shipments. A separate probe into intellectual property theft and cyber-espionage is due to report on Thursday.

Trump repeatedly attacked China’s economic record and tactics during his presidential campaign. He vowed to impose 45% import tariffs on Chinese goods as part of his America First policy for reviving US businesses.

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Since taking office, Trump has softened his position remarkably. But while global asset markets have largely discounted the threat of a serious clash between the world’s two economic superpowers, “they may have misread the political runes in Washington, underestimating lag-times as the complex machinery of the US government slowly shifts direction like a turning supertanker,” says the Telegraph.

Trump’s hawkish trade strategist, Robert Lighthizer, met the President over the weekend before accusing China of predatory behaviour and use of abusive state subsidies.

“Years of talking about these problems [have] not worked. So, expect change, and expect action,” he told reporters.

However, a series of stories from Beijing in recent weeks suggest China is not going to take the threat lying down. Sanctions against the likes of Boeing and soybeans are a likely first step in a trade dispute that could quickly spiral into all-out war.