Trump steams ahead with more tariffs as tensions escalate
Donald Trump has decided to impose tariffs on US$200 billion (NZ$305b) of Chinese goods, two people briefed on the decision said, one of the most severe economic restrictions ever imposed by a US president.
An announcement is expected within days, the people said, speaking on the condition of anonymity because they weren’t authorised to discuss internal plans.
The new tariffs would apply to more than 1000 products, including smartphones, televisions and toys. These penalties could drive up the cost of a range of products ahead of the holiday shopping season.
Trump has ordered aides to set the tariffs at 10 per cent, likely leading to higher prices for American consumers. The US imports roughly $500b in Chinese goods annually and, combined with existing tariffs, these penalties would cover half of all goods sent to the US from China each year. The 10 per cent tariff is scaled back from Trump’s initial plan to impose 25 per cent penalties, but the impact will still likely be felt by millions of American consumers.
A White House spokesman didn’t immediately respond to a request for comment. On Friday, White House spokeswoman Lindsay Walters said: “The President has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the long standing concerns raised by the United States.”
All of Trump’s top advisers have been united in his effort to push China to change it economic practices, but they have been split on his tactics.
Trump has accused China of a number of unfair trade practices, and he has threatened to impose tariffs on all Chinese imports if changes aren’t made. He wants China to buy more American products, open up China to more US investment, and stop stealing US intellectual property, among other things.
The tariffs come as a number of top White House advisers have been trying to de-escalate tensions between Trump and Chinese leader Xi Jinping. Treasury Secretary Steven Mnuchin was planning to restart talks with Chinese leaders soon, but they have vowed to retaliate to any escalation of the trade battle between the two countries with punitive steps of their own, and Trump’s move could further push Beijing to retaliate.
The decision was first reported by the Wall Street Journal.
Corporate executives increasingly believe the dispute can only be resolved by direct talks between Trump and Xi. The two leaders may see other at the UN General Assembly in New York later this month.
Trump has tried to use tariffs as a way to penalise a number of countries this year, including Mexico, Japan, Canada, and members of the European Union, hoping that the threat of driving up costs on their products will make them more open to his demands. This tactic has had mixed success.