Trump’s tariff investigation ‘bluff’ will not work on China, analysts warn

The United States’ decision to launch Section 301 investigations into alleged unfair trade practices by China and several other economies – which could allow Washington to reimpose higher tariffs – is a “bluff” designed to give US President Donald Trump some perceived leverage ahead of his expected trip to China, analysts said.But the threat is unlikely to work on Beijing, which has grown used to the president’s “art of the deal” tactics, they added.“Trump’s move before his China trip is calculated to appeal to his domestic base ahead of the midterm elections with the message: ‘I’m going to Beijing with investigations and leverage and won’t compromise,’” said Fu Weigang, president of the Shanghai Institute of Finance and Law, a private think tank.“China knows this is a result of US domestic politics, so it’s no surprise. Chinese exporters have been on the receiving end of such tactics for years, but they have become more resilient.”The Office of the US Trade Representative announced on Wednesday that it had opened fresh probes into 16 trade partners – including China, India, Japan, Mexico, the European Union and several Southeast Asian nations – under Section 301 of the 1974 Trade Act, to determine whether they had gained unfair advantages through “structural excess capacity and production”.If the investigations conclude such unfair practices have occurred, it will provide Washington with the legal basis to impose higher tariffs on those economies. Trump previously used this method to raise duties on Chinese goods during his first term in office.