According to the New York Times, President Donald Trump ordered US companies to leave China.
“It would be the most significant break with China,” The New York Times said, “since President Richard M. Nixon’s diplomatic opening to Beijing in the early 1970s.”
Georgetown University Law Professor and trade expert at the Council on Foreign Relations Jennifer Hillman stated that Trump doesn’t have the power to order U.S. companies out of China. However, he can take preventative measures.
“Under the law he cited (International Emergency Economic Powers Act of 1977),” The Washington Post said, “Trump can prevent future transfers of funds to China.”
According to CNN, Trump will also be raising tariffs to 25-30%, beginning October 1st.
On Chinese Tariffs, Trump said, “We’re up to about $550 billion—they’ve been hitting us for many, many years for over $500 billion a year, taking out of our country much more than 500 billion a year.”
The New York Times stated that American business leaders in China feel that cutting ties would result in a substantial loss.
“We are in no position to give up the China market-,” president of the American Chamber of Commerce in Shanghai Ker Gibbs said. “It’s too large, it’s too important.”
American business leaders stated that if they left China, there would be reduced sales that would allow European companies to buy businesses. In turn, this would make it difficult for the US to make a comeback in the market. The New York Times, however, stated that the President’s references of cutting ties with China were more of an attempt to inform US businesses “that they should begin to disentangle from China on their own”.
The Houston Chronicle reported that Trump has expressed second thoughts about furthering the trade war with China. The President also stated that he wouldn’t be escalating things more, but that he did have the ability to sever ties based on the International Economic Powers Act of 1977.
“If I want,” Trump said (courtesy of the Houston Chronicle), “I could declare a national emergency.”