U.S. threatens 10% more tariffs
$300B in Chinese cellphones, consumer goods would be hit in negotiating tactic
WASHINGTON — President Donald Trump intensified pressure Thursday on China to reach a trade deal by saying he will impose 10 per cent tariffs Sept. 1 on the remaining $300 billion in Chinese imports he hasn’t already taxed. The move immediately sent stock prices sinking.
The president has already imposed 25 per cent tariffs on $250 billion in Chinese products, and Beijing has retaliated by taxing $110 billion in U.S. goods.
U.S. consumers will likely feel the pain if Trump proceeds with the new tariffs.
Trump’s earlier tariffs had been designed to minimize the impact on ordinary Americans by focusing on industrial goods.
But the new tariffs will hit a vast range of consumer products from cellphones to silk scarves.
The president’s announcement via Twitter came as a surprise, in part because the White House on Wednesday had said Beijing confirmed that it planned to increase its purchases of American farm products.
That word came just as U.S. and Chinese negotiators were ending a 12th round of trade talks in Shanghai, which the White House called “constructive.”
Though the negotiations concluded without any sign of a deal, they are scheduled to resume next month in Washington.
The Dow Jones industrial average, which had been up nearly 300 points earlier in the day, was down nearly 200 points after Trump’s tweets announcing the new tariffs. The Dow closed for the day down 280 points — 1 per cent.
Trump has long said he was preparing to tax the $300 billion in additional Chinese products. But he had suspended the threat after meeting with President Xi Jinping in Osaka, Japan, in June.
It isn’t clear when American consumers are likely to feel the impact of the additional tariffs, but higher prices could show up in stores this fall.
“Attention all Target & WalMart shoppers ... the price on the goods you buy ahead of the holidays are going up due to trade policy,” tweeted Joseph Brusuelas, chief economist at the consultancy RSM.
Besides announcing the additional tariffs on Chinese imports, Trump tweeted that “we look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”
The president accused Beijing of failing to follow through on stopping the sale of fentanyl to the United States or on purchasing large quantities of farm goods such as soybeans.
Speaking to reporters Thursday at the White House, Trump complained that President Xi is “not moving fast enough.”
Trump said he scheduled the additional tariffs to begin Sept. 1 to give exports already en route from China time to get to the United States — a journey that can take three or four weeks.
By setting the import taxes at 10 per cent, he has leeway to ratchet them higher if necessary to further increase pressure on Beijing.
“Until such time as there’s a deal,” Trump said, “we’ll be taxing them.”
The world’s two biggest economies are locked in a trade war over U.S. allegations that Beijing uses predatory tactics.
Included in that allegation is the suggestion they are stealing trade secrets. Also suggested is China is forcing foreign companies to hand over technology in a drive to overtake American technological dominance.
“The fact that this tweet comes after only one meeting with the Chinese delegation following the resumption of talks is extremely concerning,” said Rick Helfenbein, president of the American Apparel & Footwear Association.