U.S may impose new 10% tariff on China
President WASHINGTON — Donald Trump intensified pressure Thursday on China to reach a trade deal by saying he will impose 10% 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% tariffs on $250 billion in Chinese products, and Beijing has retaliated by taxing $110 billion in U.S. goods.
U.S. consumers are likely to 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. 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 ended without any sign of a deal, they are scheduled to resume next month in Washington.
Trump has long said he was preparing to tax the $300 billion in additional Chinese tariffs. But he had suspended the threat after meeting with President Xi Jinping in Osaka, Japan, in June.
Besides announcing the additional tariffs on Chinese
imports, Trump tweeted that “we look forward to continuing our positive dia- logue with China on a com- prehensive Trade Deal, and feel that the future between our two countries will be a very bright one!”
Trump accused Beijing of failing to follow through on stopping the sale of fentanyl to the United States or on purchasing large quan-
tities of farm goods such as soybeans.
The world’s two biggest economies are locked in a trade war over U.S. allegations that Beijing uses predatory tactics — including stealing trade secrets and forcing foreign companies to hand over technology — in a drive to overtake American technological dominance.
Trump’s trade war and its consequences were a key factor in the Federal Reserve’s decision Wednesday to cut interest rates in an otherwise healthy U.S. economy. During a news conference, Chairman Jerome Powell pointed repeatedly to the uncertainty caused by Trump’s pursuit of trade wars on multiple fronts as a reason for the rate cut.
The president’s decision to impose a 10% tax on an additional $300 billion of Chinese imports might have been predicated, in fact, on his confidence that Powell’s Fed stands ready to cut rates again. The bond market signaled its belief in that theory Thursday, with Treasury yields dropping sharply after Trump’s announcement.