Trump boasts of the power of tariffs

President expected to levy $200B on China

U.S. President Donald Trump boasted about the power of taxing imports Monday and warned that countries that do not agree to his trade demands will be “tariffed,” escalating tensions as crucial negotiations loom with China and Canada.

In a pair of tweets, Trump continued to make the case that tariffs largely harm the countries that are taxed, saying the impact on the U.S. economy has been “almost unnoticeable.” His comments are likely to further rattle U.S. businesses, which have pleaded with the administration to abandon the tariffs and warned they will raise prices, cost jobs and hurt the U.S. economy.

Trump is not expected to relent.

He is expected to announce this week that the United States will impose tariffs on another $200 billion worth of Chinese goods, a move that people familiar with the negotiations say could scuttle trade talks that are planned with the Chinese next week.

Trump has threatened to tax all Chinese goods if Beijing does not change its trade practices and has already levied tariffs on steel and aluminum imports from other countries, including Canada, Mexico and the European Union.

The president tweeted that his steel tariffs have given “new life” to the domestic steel industry, and that price increases from those and other tariffs have barely been felt in the U.S. economy.

Neither claim is supported by economic data. Steel prices are up more than 10 per cent since February, the month before Trump announced his long- awaited tariffs of 25 per cent on steel and 10 per cent on aluminum, from a wide swath of trading partners.

Prices on washing machines jumped 20 per cent in the months following Trump’s decision to impose tariffs on imported washers.

Since Trump announced his steel and aluminum tariffs, employment in primary metals manufacturing — which includes those industries — has increased by less than 1,000 jobs, according to the Labor Department.

Still, Trump said tariffs had put the United States “in a strong bargaining position,” alluding to upcoming talks with Canada in an attempt to complete a renegotiation of the North American Free Trade Agreement, and to a scheduled-but-tenuous round of talks with China next week.