DAVID GREENE, HOST:
The United States and China have been locked in this trade war for about a year now, and it looks like things could intensify.
STEVE INSKEEP, HOST:
The president threatened new tariffs on Thursday. His move came one day after U.S. advisers returned from trade talks in Shanghai without a deal. To be clear, the president makes a lot of threats, including over tariffs. But he has followed through on some of those threats. And these taxes paid by Americans on imports would affect $300 billion in Chinese goods. When combined with previous tariffs on $250 billion of Chinese goods, Americans would be paying taxes on almost everything that China ships here.
GREENE: And let's talk this through with NPR's Jim Zarroli, who covers economics and business and joins us. Hey, Jim.
JIM ZARROLI, BYLINE: Good morning.
GREENE: So we're talking about products in this new round of tariffs if the president follows through on his threat that - I mean, stuff that a lot of Americans buy, right?
ZARROLI: Yeah, they will - they - and they are going to be affected by that. You remember the - there was an earlier round of tariffs imposed by the president last year that was on a lot of industrial goods, like things that go into the manufacture of other products. So consumers didn't necessarily feel the impact directly. This time, the tariffs are going on the kinds of goods that people buy every day, things like socks, T-shirts, laptops, smartphones.
It will cost importers 10% more to bring them into the country. Trump says that could go up to 25% or more. Now, not all of that cost is going to be passed on to consumers, but some of it probably will, which means we could see prices for these kinds of things rising.
GREENE: So the president announced this, these new tariffs or these threats, in a tweet yesterday. Coming out of these talks in Shanghai, I mean, I know it didn't seem like there was much progress. But was there any hint that this was coming?
ZARROLI: Well, you know, we - I guess with the Trump administration, we've sort of learned to expect the unexpected. The president had talked about a 25% tariff in - on May. Then he met with President Xi Jinping, and he said he wanted to allow time for negotiations, so they were suspended.
Then, a few days ago, the U.S. trade representative, Robert Lighthizer, and the Treasury secretary, Steve Mnuchin, went to Shanghai to meet with government officials. It was a very short meeting, which didn't seem to bode well. But then Lighthizer's office issued a statement saying the meeting was constructive. Then suddenly, yesterday Trump took this step. Here is what he said to reporters.
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PRESIDENT DONALD TRUMP: When my people came home, they said, we're talking. We have another meeting in early September. I said, that's fine. But in the meantime, until such time as there's a deal, we'll be taxing them.
GREENE: OK. I mean, so the president's saying there's another meeting coming up. Negotiations, it's - supposedly are still ongoing. So why sort of make things more tense? Did the president explain this move and why now?
ZARROLI: He said China had broken two promises. It said it would stop the flow of the synthetic opioid fentanyl into the U.S. Trump said it didn't do that. It also promised to buy more American farm products. Farmers are a big casualty of the trade war. Trump said it didn't do that either. I mean, I think what we're seeing here is just pretty clearly an effort to step up the pressure on China. The U.S. wants it to do things like protecting intellectual property, opening up its markets. Trump has said this is a good time to tighten the screws on China because its economy is slowing.
GREENE: How'd the stock market respond to the president's tweet?
ZARROLI: Well, the stock market usually reacts negatively when things like this happen, and that certainly happened yesterday. The Dow Jones Industrial Average was down more than 1%. We saw big declines in companies that make products in China like Steve Madden. You know, 70% of the shoes that people wear, Americans wear are made in China. Also big decline in companies like Caterpillar that sell to China. And we saw oil prices fall. The economy's already slowing in many parts of the world. A lot of people are afraid that this trade war is just going to make things worse.
GREENE: All right. NPR's Jim Zarroli for us this morning. Jim, thanks a lot.
ZARROLI: You're welcome.
GREENE: And we're seeing tense relations between the United States and China play out in another way as well.
INSKEEP: Yeah. FBI agents have been visiting Americans who studied in China. NPR News has learned that the visits came to students at an elite program at Peking University in Beijing. Federal agents are asking if these elite students could be co-opted by Chinese espionage efforts.
GREENE: NPR's Emily Feng broke this story and joins us on the line from Beijing. Good morning, Emily.
EMILY FENG, BYLINE: Good morning.
GREENE: OK. So even the idea or suggestion that Americans could be co-opted by the Chinese to spy on the United States, this is a big deal. What concerned the FBI here?
FENG: Well, so all these students were at Yenching academy. As you mentioned, they're in Beijing. About a third of the students Yenching welcomes every year are Americans and Canadians. And the idea is that they're rising stars. They'll make friendships in China. They'll bring those back, and they'll build bridges between the U.S. and China.
But that's specifically what the FBI is worried about. They're worried that those relationships have led some Yenching graduates to be co-opted by Chinese intelligence. And NPR learned of five such American graduates from Yenching Academy who had been quietly approached by the FBI in the last year. We published the story earlier today. And since then, actually more students from other academic programs have reached out saying the same thing happened to them.
GREENE: Oh, wow. So the numbers could be even more. Is there a history of this - I mean, of China trying to use students or researchers and trying to recruit them as spies, essentially?
FENG: There are a small handful of cases. The most notorious one happened in 2011. That year, there was a man named Glenn Duffie Shriver who was convicted of espionage. He had studied in China and then moved there after graduation, where he met three intelligence agents who then paid him to apply for the CIA and State Department jobs. But he was found out.
Fast-forward to 2019, I think there's an even more widespread fear that China is using these so-called non-traditional actors - so students, researchers - to gather intelligence. It's already become much harder for Chinese students to come study in the U.S. in certain science, technology fields specifically because of these concerns. And now we're seeing the opposite happen, U.S. students coming under suspicion. So we'll have to see if Americans who have stayed in China will experience any negative consequences such as, for example, not being able to get a security clearance if they're working for a government position.
GREENE: And this comes at a moment, of course, what we were just talking about, the trade war, I mean, the - China, the United States not exactly getting along right now. How might this fit into that larger context?
FENG: I mean, since the trade war began last year, the U.S. and China, particularly the U.S., has been working to disentangle the flow of students, people, trade, investment, even academic collaborations between the two countries. So when the FBI and other intelligence agencies start looking at anyone who's studied in China, that's part of that effort. But many worry that when you define the category of who should come under suspicion so broadly that you're scrutinizing too many innocent people.
And also, keep in mind these are the people, people who've studied in China, that can be useful in the future for furthering U.S.-China relations. So some say, you know, it's counterproductive. But I think what the story really illustrates to me is this central conundrum that's emerging as the U.S. approaches China now, which is how do you protect the U.S.'s national security without endangering the democratic principles that allow the right people and the right ideas to move back and forth between the two countries?
GREENE: Yeah. That's a big, important question. NPR's Emily Feng in Beijing this morning. Emily, thanks for your reporting.
FENG: Thank you.
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GREENE: We've come to a major moment of transition in Puerto Rico. After weeks of these massive protests calling for his resignation, Governor Ricardo Rossello says he will leave office by 5 p.m. today.
INSKEEP: But here's the thing. It's unclear who will replace him. Succession plans, as we've been reporting, have fallen into chaos. One potential candidate rejected the position. And Governor Rossello's hand-picked favorite for the job is facing opposition from the island's legislature.
GREENE: All right. Let's talk about this moment with NPR's David Welna, who is in San Juan. Hi, David.
DAVID WELNA, BYLINE: Hi, David.
GREENE: So what is the latest now, as we're hours (laughter) - coming up on hours until Rossello is supposed to step down?
WELNA: Well, quite honestly, it's a bit of a mess. Nobody knows for sure who will be this island's governor at 5 o'clock this afternoon, which is when Governor Rossello has said he'll step down. We don't even know where a transfer of power might take place, much less who'll end up in charge. There's speculation that Rossello himself may stay on longer as governor, given how unresolved things seem to be here.
A few days ago, it looked like it would be his secretary of Justice, Wanda Vazquez, who'd succeed him because the secretary of state, who would be the first in line to replace Rossello, quit last month, and she'd be next. But on Tuesday, the governor appointed Pedro Pierluisi, whom he narrowly defeated in his party's gubernatorial primary three years ago, to be secretary of state. In effect, this disgraced governor has hand-picked his successor.
GREENE: Well - and the state legislature is opposed to that hand-picked successor, right?
GREENE: Why is that?
WELNA: Well, the governor seems to have circumvented Puerto Rico's Congress in naming Pierluisi as his successor. There's a loophole in the law here that says the secretary of state does not need to have been confirmed by the Congress before replacing the governor. But the courts here could rule that that loophole is unconstitutional. So the governor has also convened a special session of Congress to confirm Pierluisi. That was yesterday. It's sort of taking a belts-and-suspenders approach.
Now, the president of the Senate, Thomas Rivera Schatz, belongs to the same political party as the governor and Pierluisi. But he's also hugely at odds with them, and many here suspect he wants to end up with the governorship. And yesterday, as Pierluisi looked on from the Senate gallery, Rivera Schatz declared he would not get a majority vote of the votes in the Senate. And he postponed holding a vote until sometime next week on Pierluisi's nomination.
The Senate leader pointed out that the man who would be Puerto Rico's next governor has been up in Washington working for a law firm that advises an unelected financial oversight board that's widely despised here. Here's a bit of what he said.
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THOMAS RIVERA SCHATZ: (Speaking Spanish).
WELNA: He said that this does not inspire any confidence in him because the - this was a lawyer who worked for Puerto Rico's No. 1 enemy. So things are not looking good in the Senate for him.
GREENE: Well, and I just think about all the people who took to the streets in Puerto Rico to force Rossello's resignation now watching this moment of uncertainty. How are they feeling? Who do they want?
WELNA: Well, it's not clear exactly who they would want. They are not crazy about Pierluisi. They do not want the secretary of Justice, Wanda Vazquez, either. So really, it's more that they're against people rather than for anyone.
GREENE: And as you said, there's a chance that Rossello could stay on past this 5 p.m. deadline, which raises a whole new set of questions. NPR's David Welna reporting in San Juan, Puerto Rico. Thanks a lot, David.
WELNA: You're welcome.
(SOUNDBITE OF HANDBOOK'S "CAN'T TALK NOW") Transcript provided by NPR, Copyright NPR.