Trump's tariffs on China
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What is the main topic discussed in this episode?
Breakfast Business with Enterprise Ireland on Newstalk.
What recent tariff changes did Trump impose on Chinese goods?
Those who thought that Trump's tariff wars had died down a bit were given a rude awakening at the weekend when he slapped a new 100% tariff on all Chinese goods. Although he softened his tone two days later, Trump didn't cancel them. On top of that, there's a risk, though, of China taking retaliatory action against European companies after the Dutch government effectively expropriated a Chinese semiconductor company, which it accused of intellectual theft. So lots to talk about with Finbar Birmingham, the Europe correspondent of the South China Morning Post, who's on the line. Good morning, Finbar.
Good morning, Joe.
Now, Finbar, let's start with China's reaction to this 100% tariff threat. The usual response or relatively muted, would you say?
Well, the response to the 100% threat, nothing so far. I think that in the days since that, we've actually seen that both sides have softened their tone. But it's interesting, what did the 100% tariff threat come in response to? That was the big one from the Chinese. That was when China intervened. announced that it would tighten the curbs on the export of rare earth elements and magnets. And this was really sweeping. It would mean that anybody who wants to export those, any product that had a trace of a Chinese rare earth anywhere in the world would have to require a license from Beijing. So that was huge. And that's when Trump then escalated with the 100%. So it's broader and it has many tentacles, this version of the trade war.
It's very asymmetric, going from tariffs to products and so on. They seem to be looking for an off-ramp. Trump seems to want his meeting with Xi Jinping in South Korea at the APEC summit in a couple of weeks. We don't really know where it's going, but we have seen these sort of patterns before.
Yeah. What we what we usually like, what Trump usually likes seeing after he's done his taco maneuver is to have the big set piece meeting, as you were saying, in which everybody shakes hand and he looks like the great dealmaker. I presume the November 1st deadline, which was set by Trump at the weekend, will be kicked into the long grass until we know a little bit more about that meeting.
We'll see. I mean, he has done that before. You know, the term taco, as you use, Trump always chickens out, although occasionally he has followed through. I mean, don't forget that earlier in his second term, we did have a period in which both sides had tariffs north of 100% on them and we saw a big fall away in trade. So it's a bit of a fool's errand to try and protect exactly what Trump will do. He is volatile, even though he has got characteristics which we can in which we can certainly sense patterns. I mean, an additional 100% would push tariffs again north of 150%, which is extreme. I mean, it basically rules out any form of normal trade. So it wouldn't be good for anybody, really. It certainly wouldn't be good for Europe, because we would end up picking up a lot of diverted trade coming from the Chinese in the form of cheap imports, which
Sounds great, but if you're a local manufacturer, you may not want to see that coming down the road.
Absolutely, because it looked like dumping and it could lead to retaliatory action from the Europeans. Talking of retaliatory action, the Dutch government effectively took control of a Chinese-owned entity called Nexperion over the weekend. What did they do and why did The Hague react in such a manner?
How did China initially respond to Trump's 100% tariff threat?
We're still trying to figure this one out. I mean, it was dramatic over the weekend. A Chinese company called Wingtech, which bought a controlling stake in Nexperia, the Dutch chipmaker, in 2019, filed a notice quietly at the Shanghai Stock Exchange on a Sunday saying that the Dutch government had effectively... seized control of its asset in the Netherlands. Now, it emerged later on Sunday evening, the Dutch government confirmed that they had used something called the Goods Availability Act, a very sort of obscure Cold War piece of legislation that's supposed to be reserved for emergency situations such as wartime.
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