Trump is “hell-bent” on trade war with China – China’s latest top news

Jeremy Goldkorn’s selection of the top stories from China on June 30, 2017. Part of the daily SupChina newsletter, a convenient package of China’s business, political, and cultural news delivered to your inbox for free. Subscribe here.

Trump’s China policy this week: trade war

Axios, which has become a go-to source for insider knowledge of the Trump White House, reports that “Trump plots trade war” with China, despite the overwhelming opposition of his advisors. According to the report, Trump and a small handful of his most nationalistic officials are “hell-bent” on imposing heavy tariffs on Chinese steel, possibly extending to other products like “aluminum, semiconductors, paper, and appliances like washing machines.”

  • Though “more than 75%” of the advisors at a cabinet meeting earlier this week were opposed to the idea as “bad economics and bad global politics,” sources told Axios that “everyone left the room believing the country is headed toward a major trade confrontation.”
  • Trump has already shown his newfound willingness to put appeal to his political base above cooperation with China in climate change. On June 29, the New York Times reported (paywall) that the U.S. has signed off on selling “more than $1 billion in arms to Taiwan,” in “yet another sign that the Trump administration is embracing a far more confrontational approach with China.” According to Reuters, the U.S. treasury department also extended sanctions in China to two individuals, Sun Wei and Li Hong Ri, and a company, Dalian Global Unity Shipping, for ties to North Korea.
  • These steps build on actions Washington has taken this week to ratchet up the pressure on Beijing, including denouncing its human rights record, sanctioning a Chinese bank, allowing the U.S. Navy to make port calls in Taiwan, and more: See our roundup yesterday. However, as with all things Trump, whims are always subject to change; stay tuned.

Xi’s second day in Hong Kong

Xi Jinping is still in Hong Kong celebrating the return of the former British colony to China 20 years ago. Three news items worth noting:

Northern China in severe drought

China’s territory is around 20 percent desert, but that proportion is growing due to a combination of poor land use and climate change, the New York Times explained (paywall) in a large multimedia feature last October. The drought in northern China has continued, the Times reported (paywall) on June 29, and the Inner Mongolian Autonomous Region’s Hulunbuir alone has suffered 5.3 billion yuan, or $780 million, in losses. This makes it the “worst drought on record” for the region, officials told the Times.