MercoPress. South Atlantic News Agency

Trump thinking on ways of making China accountable for the coronavirus: raising tariffs an option

The Washington Post reported some officials had discussed the idea of canceling some of the massive US debt held by China as a way to strike at Beijing

US President Donald Trump said on Friday raising tariffs on China is “certainly an option” as he considers ways to retaliate for the spread of the COVID-19 out of Wuhan, China.

“A lot of things are happening with respect to China. We're not happy, obviously with what happened. This is a bad situation - all over the world, 183 countries. But we'll be having a lot to say about that. It's certainly an option. It's certainly an option,” Trump told reporters.

Trump's sharpened rhetoric against China reflected his growing frustration with Beijing over the pandemic, which has cost tens of thousands of lives in the United States alone, sparked an economic contraction and threatened his chances of re-election in November.

“There is a discussion as to how hard to hit China and how to calibrate it properly,” a White House source admitted as Washington walks a tightrope in its ties with Beijing while it imports personal protection equipment (PPE) from there and is wary of harming a sensitive trade deal.

Trump made clear, however, that his concerns about China's role in the origin and spread of the coronavirus were taking priority for now over his efforts to build on an initial trade agreement with Beijing that long dominated his dealings with the world's second-largest economy.

“We signed a trade deal where they're supposed to buy, and they've been buying a lot, actually. But that now becomes secondary to what took place with the virus,” Trump told reporters. “The virus situation is just not acceptable.”

The Washington Post, citing two people with knowledge of internal discussions, reported that some officials had discussed the idea of canceling some of the massive US debt held by China as a way to strike at Beijing for perceived shortfalls in its candidness on the COVID-19 pandemic.

Trump's top economic adviser denied the report. “The full faith and credit of US debt obligations is sacrosanct. Period. Full stop,” White House economic adviser Larry Kudlow underlined.

Asked whether he would consider having the United States stop payment of its debt obligations as a way to punish Beijing, Trump said: “Well, I can do it differently. I can do the same thing, but even for more money, just by putting on tariffs. So, I don't have to do that.”

Trump and his top aides, while stepping up their anti-China rhetoric, have stopped short of directly criticising Xi, whom the US president has repeatedly called his “friend”.

Among the other ideas under consideration for retaliation against China are sanctions, new non-tariff trade restrictions and a possible effort to lift China’s sovereign immunity. Lifting sovereign immunity could allow the US government and American citizens to file lawsuits seeking damages from Beijing in US courts.

Apparently the options are being discussed, informally for now, across government agencies including the State Department, White House National Security Council, Treasury Department and Pentagon.

The strongest pressure for action is coming from the National Security Council, including deputy national security adviser Matthew Pottinger, while Treasury officials are advising caution.