January 17, 2016
By: Anna Sayre, Legal Content Writer

In this second part of the series, we examine Mr.Trump’s comments and stated views on China.

Power of US President ToInfluence Sanctions Policy

The US President has substantial power to enforce, strengthen and waive sanctions with a stroke of a pen. Though sanctions may be authorized by statutes, most sanctions imposed by the Office of Foreign Assets Control (OFAC) arise from the exercise of Presidential national emergency powers through executive orders. The International Emergency Economic Powers Act (IEEPA) grants the President broad authority to respond to “unusual or extraordinary threat[s]” to the national security, foreign policy, or US economy.  The President exercises this authority by officially declaring what he/she believes to be a ‘national emergency’.

Following the terrorist attacks of September 11, 2001, the President’s IEEPA powers were expanded by the USA PATRIOT Act in October 2001, which sought to strengthen national security controls across a broad spectrum of government and private sector activity. Among other provisions, the Act allows the assets of a foreign national or a so called “specially designated national or entity” that supports or engages in terrorism, to be blocked without a hearing or evidence of wrongdoing while an investigation into such conduct proceeds.

Early Breitbart Interview Points to Increase in Import Taxes

On November 5, 2015, Trump was interviewed on Steve Bannon’s radio show “Breitbart News Daily”. The Breitbart News Network is an online news resource that represents far-right views and has been run by Bannon since 2012 prior to joining the Trump campaign. On November 13th, 2016, Trump named Bannon as his chief strategist in the White House.

The following quotations come from that appearance by President-Elect Trump, on Bannon’s program regarding China.

Mr. Trump: “They are not going to do so well, the Chinese, it’s going to be a different story”. (…) “I am a free trader, but it’s gotta be fair. China is killing us. I’m telling you, they are taxing us.”

Mr. Bannon: “You think free trade as a concept has been turned into kind of a fetish by the Wall Street Journal, where it says America gives everything away, everybody takes advantage of us under this (inaudible) free trade. You say, hey, I’m a free trader, but I am also a savvy business guy who has worked throughout the world, I know what the deal is.”

Mr. Trump: “It’s gotta be fair. It’s gotta be fair. We don’t tax them, they tax us. I have friends who are manufacturers and all, they can’t get their product into China, no way they get their product into China. When they do, they get taxed. When China sends their product, it comes easily and no tax. That is not fair. We have a trade imbalance with China of almost $400 billion a year. I mean, Steve, it’s $400 billion a year. I will stop all of that.”

China “Great Magicians”, says Trump

In the first presidential debate in September 2016,Trump said China was stealing American jobs, devaluing its currency to gain economic advantage, and engaging in state-sponsored cyber hacking.

That month, in an interview on CNBC,Trump claimed that China“suck[s] the blood out of [the US]” and added that the Chinese were “great magicians” who had stolen US intellectual property. He suggested that rather than being a big buyer of Chinese imports the US should use its leverage to force a more balanced relationship. “We should get China to fix that problem. We should use our economic power. Because without us, China would be in serious trouble,” he said.

On the Campaign Trail

In the 2016 campaign, then-candidate Trump showed his distaste for current US-Chinese relations by:

  • frequently stating that China is “raping our country” and is America’s “No. 1 abuser” because it uses the US as a “piggy bank”;
  • telling the Economic Club of New York that China was “a currency manipulator” of “grand master level” and that tariffs should be applied because of the “unfair advantage”; and
  • pledging to declare China a “currency manipulator” during his first day in office as well as impose as much as a 45% tariff on goods.

Since then, Trump has continued to strongly disapprove of the present US relationship with China.

Rejection of “One China” Policy

On December 2, 2016, Trump accepted a call from the elected leader of Taiwan, Tsai Ing-wen,in apparent contravention of a longstanding US agreement with China called the “One China” policy. Under this accord, the US has agreed to reject the notion of Taipei’s independence in return for diplomatic and economic relations with China. The conversation by Trump with the leader of Taipei caused China to object and stirred the international community. Trump responded that the One China policy would be placed on the negotiating table as well as future dealings with the Chinese.

Trump told Fox News, “I fully understand the ‘One China’ policy, but I don’t know why we have to be bound by a ‘One China’ policy unless we make a deal with China having to do with other things, including trade”. He continued, “I mean, look, we’re being hurt very badly by China with devaluation, with taxing us heavy at the borders when we don’t tax them, with building a massive fortress in the middle of the South China Sea, which they shouldn’t be doing, and frankly with not helping us at all with North Korea.”

Trump’s indication that he would want China to come to the bargaining table on trade and help rein in North Korea has not sat well with the Chinese media, which asserted that the ‘One China’ policy could not be “bought and sold” and that, if Trump discarded the ‘One China’ policy, it could spark a “real crisis”. China’s Foreign Ministry said it was”seriously concerned” by Trump’s questioning the policy, adding that bilateral cooperation would be out of the question if the policywas “compromised or disrupted.”

Future Relations with China

The confrontation between the incoming US president and China promises to become one of the major hotspots in the sanctions and trade penalties arena and will capture the attention of all sanctions and trade compliance officers in the US and worldwide.

In the next part of this series, we examine comments and assertions regarding economic sanctions and export controls policies by Trump’s Chief White House Strategist, Steve Bannon.

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