State of the Union: Trump vows to end China's job 'theft'

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Donald Trump delivering the State of the Union addressImage source, Getty Images

US President Donald Trump has vowed to end what he described as China's "theft" of American jobs.

Giving his second State of the Union address, Mr Trump told the US Congress a trade deal with China would require "structural changes to end unfair trade practices".

The speech comes ahead of last-minute talks between the two countries aimed at reaching a deal on trade.

New tariffs could kick in on 1 March when a 90-day trade war truce ends.

The US and China are locked in a damaging trade spat that has seen both sides levy tariffs on billions of dollars worth of each other's goods.

US negotiators are expected to arrive in Beijing over the weekend ahead of negotiations next week, according to US media reports.

Major changes required

In the speech, Mr Trump signalled that the US would take a tough stance.

"We are now making it clear to China that after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end," Mr Trump said.

Image source, Getty Images

Last year, the US levied tariffs of between 10% and 25% on $250bn worth of Chinese goods.

Beijing hit back with tariffs on $110bn of US goods.

The US tariffs are aimed at providing protection to US firms from Chinese competitors who can often produce goods more cheaply.

However, the tariffs are often passed on in whole or in part to consumers, who pay higher prices as a result.

Also, UN research released yesterday argued that while Asian supply chains are likely to suffer from the tariffs, US firms won't see much benefit.

Instead, European, Japanese, Canadian and Mexican firms are likely to reap the greatest benefits, the research found.

In the speech, Mr Trump also took a swipe at the trade policies of previous administrations.

"I don't blame China for taking advantage of us. I blame our leaders and representatives for allowing this travesty to happen," he said.

"We are now working on a new trade deal with China. But it must include structural changes to end unfair trade practices, reduce our chronic trade deficit and protect American jobs."

China rejects US complaints

Mr Trump's comments come as Beijing rejected a US report on China's compliance with the World Trade Organisation.

China's Commerce Ministry said the US Trade Representative's report was contrary to the facts and based on US domestic laws, Chinese state media reported.

The Ministry said China firmly opposes unilateralism and protectionism and is committed to the development of economic globalisation.

Reciprocal tariff powers

Mr Trump also pushed for additional legislation that could expand his power to impose tariffs.

"Tonight I am also asking you to pass the Reciprocal Trade Act, so that if another country places an unfair tariff on an American product, we can charge them the exact same tariff on the exact same product that they sell to us," he said.