Trump edges closer to a trade war with China, thanks to aluminum foil

The United States has decided to levy an import tax on shipments of aluminum foil from China, penalizing the country for what U.S. trade officials say are unfair subsidies of its products.

It’s a decision that could add to mounting tensions between the world’s two biggest economies over trade, as the Trump administration moves toward a tougher stance on Chinese trade violations.

A preliminary decision issued by the Commerce Department on Tuesday evening found that the products were receiving financial assistance from the Chinese government. It specifically levied “countervailing duties” on four Chinese companies, ranging from an 81 percent import tax on imports from two firms to a 17 percent tax on another. Chinese companies not specifically named face a duty of 22 percent on products they export to the U.S. market.

The decision is a routine one, as the United States frequently sets duties on imports it believes are unfairly subsidized. But it takes on more importance now that the Trump administration is ratcheting up pressure on Chinese trade practices, said Chad Bown, a senior fellow at the Peterson Institute.

“This would happen under any administration. I think what’s interesting and useful about it, though, is that it does tie into this bigger aluminum and overcapacity issue,” Bown said.

The Trump administration has frequently criticized China for flooding global markets with ultracheap products and putting competing industries in the United States out of business. Many of China’s industries are owned or subsidized by the state, which means they can continue to pump out products even when it is not profitable to do so, economists say.

Trump spoke often on the campaign trail about cracking down on China’s trade abuses. But in the initial months of his presidency, he appeared to be willing to cut the Chinese more slack on trade in exchange for help with diplomacy goals, such as pressuring North Korea to abandon its nuclear weapons program.

“I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem!” Trump tweeted in April.

In more recent months, however, the president appeared to abandon that strategy, while simultaneously ratcheting up trade pressure on Beijing. The Chinese “do NOTHING for us with North Korea, just…

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