Trump escalates trade war with China
The Trump administration will slap a 10-per-cent tariff on about US$200 billion in Chinese goods next week, and more than double the rate in 2019, setting up what could be a prolonged trade war between the world’s two biggest economies.
The administration is giving U.S. businesses a chance to adjust and look for alternative supply chains by delaying an increase of the tariff to 25 per cent until next year, two senior administration officials who declined to be identified told reporters by conference call on Monday. The 10-per-cent tariff will take effect on Sept. 24, the officials said.
“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies,” President Donald Trump said in a statement released on Monday evening. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”
Smart watches and Bluetooth devices were removed from the tariff list, along with bicycle helmets, high chairs, children’s car seats, playpens and certain industrial chemicals. They were among 300 tariff lines scrubbed from the preliminary target list released in July, according to one of the officials. No items were added, though the value will remain at US$200 billion worth of Chinese imports, the officials said.
Trump continues to ratchet up pressure on Beijing to change its trade practices even as he floats the idea of talks. Business leaders are warning the high-stakes strategy could upend their supply chains and raise costs, as economists worry Trump’s tactics could derail the broadest global upswing in years.
“It appears that the administration responded to some industry concerns, but for many American businesses and consumers this still represents a rapid acceleration of costs and much higher uncertainty,” said Rufus Yerxa, president of the National Foreign Trade Council. “Business hates uncertainty.”