In pressing China on trade, Trump should embrace TPP, not tariffs

THE third round of the Trump administration's ongoing trade spat with China - 10 per cent tariffs on US$200 billion of Chinese imports - takes effect this week, with the tax set to rise to 25 per cent from the start of 2019.

President Donald Trump also served notice that the US would pursue tariffs on another US$267 billion of Chinese goods if Beijing decides to take retaliatory action. Indeed, the White House occupant sounds very assertive, if not victorious, about his economic nationalist strategy by which he expects to force China to change its commercial policy. The tariffs on China were working "big time", a triumphant President Trump tweeted recently. It may be too early to declare victory, but he could certainly point out that China's growth is slowing at a time when the US economy is expanding at its fastest pace since 2014, providing the Americans with much more room to manoeuvre. Wall Street is at a record high while the US jobless rate is at an all-time low.

At the same time, since the Americans buy far more from the Chinese than vice versa, the Trump administration has more scope to impose tariffs on them. In fact, if President Trump follows through on his latest tariffs threat, almost all imports of Chinese goods, which totalled US$505 billion last year, would be covered.