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Trump on US Firms Doing Business in China, The War Expands

Trump on US Firms Doing Business in China, The War Expands

Just several hours, last Friday, after China announced that it will raise tariffs on US goods, President Donald Trump ordered US companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USS.” Now many people are going to ask about the legal issues that this might bring up simply because the US President generally does not make such announcements, especially demands that could cost said companies billions in profits. Now some US companies have already started shifting operations out of China, especially since this tie-for-tat tariff and trade war started and is now accelerating for about a year.

Look at this number – US companies invested a total of $256 billion in China between 1990 and 2017, while China invested $140 billion in the United States. These estimates are sourced from CNBC, an article that mentions the Rhodium Group research institute for these historical numbers. But there is growing concern that Trump can treat China like Iran and force sanctions, and would involve declaring a national emergency under a 1977 law called the International Emergency Powers Act, or IEEPA. The key question is this: Could the US President inflict unintended harm on the US economy or major US companies? More on this topic in the coming weeks.

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