Published: Thu, June 28, 2018
Money | By Wilma Wheeler

US Defence Secy James Mattis visits China as security tensions rise

US Defence Secy James Mattis visits China as security tensions rise

After talks over the issue broke down this spring, the United States and China said they would both apply new tariffs to billions of dollars worth of goods from each other's country on 6 July.

Mnuchin tweeted that these reports were "false, fake news", although he did not deny that the plans existed - only that they would be applied not just to China.

U.S. Treasury Secretary Steven Mnuchin said on Monday that forthcoming investment restrictions from the department will not be specific to China but would apply "to all countries that are trying to steal our technology".

The Trump administration is expected to announce limits on Chinese investment soon - a move that is shaking the business world.

The US is set to announce new rules to curb Chinese investment in critical US technology.

"But in many ways, the U.S. tech sector is now being treated as an issue of economic security and national security", said Triolo, which he said would prevent further collaboration - especially following concerns about Chinese espionage on USA communications networks.

Societe Generale, in a research note, said that the near-term implications of the trade spat - if all threats are followed through - could result in a drag on the Chinese economy of close to 1 percent of gross domestic product growth and 3 million to 4 million jobs, while the effect on US real GDP would be a "far more modest" 0.1 percent to 0.2 percent.

The economy "is going to a attractive place right now", Navarro said on CNBC.

On Wall Street, the Dow Jones Industrial Average .DJI fell 328.09 points, or 1.33 percent, to 24,252.8, the S&P 500 .SPX lost 37.81 points, or 1.37 percent, to 2,717.07, and the Nasdaq Composite .IXIC dropped 160.81 points, or 2.09 percent, to 7,532.01.

New export controls would make it more hard for United States firms to sell technology to China if Washington deems it to be "industrially significant". President Donald Trump's trade clash with China has already fed global economic uncertainty. The measures have bipartisan support and the backing of top Trump administration officials.

Beijing is also suspicious of USA intentions toward self-governing and democratic Taiwan, which is armed by the United States.

The twin initiatives, set to be announced by the end of the week, are created to prevent Beijing from moving ahead with plans outlined in its "Made in China 2025" report to become a global leader in 10 broad areas of technology, including information technology, aerospace, electric vehicles and biotechnology.

The pushback took the form of Brussels and Beijing agreeing to form a group inside the World Trade Organization (WTO) dedicated to rewriting the global rules on subsidies and tech policy in the light of Trump's actions.

"I think the way to address issues between our two nations is to first establish a transparent strategic dialogue: how do the Chinese see the relationship with us developing, how we see it developing", he said. That could include holding goods in ports or hold up approvals.

The government official said the Treasury would invoke the International Emergency Economic Powers Act of 1977 (IEEPA) to devise the restrictions.

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