Trump has decided to impose tariffs on $200 billion in Chinese goods in escalation of trade battle

Washington Post

President Donald Trump has decided to impose tariffs on $200 billion worth of Chinese goods, two people briefed on the decision said, one of the most severe economic restrictions ever imposed by a U.S. president.

An announcement is expected to come within days, the people said, speaking on the condition of anonymity because they were not authorized to discuss internal plans.

The new tariffs would apply to more than 1,000 products, including refrigerators, air conditioners, furniture, televisions and toys. These penalties could drive up the cost of a range of products ahead of the holiday shopping season, though it's unclear how much.

Apple said recently its Apple Watch, AirPods, MacMini and a variety of chargers and adapters would be caught in the tariff war. "Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers," the company said in a letter to the U. S. Trade representative. "The burden of the proposed tariffs will fall much more heavily on the United States than on China."

Trump has ordered aides to set the tariffs at 10 percent, which is likely to lead to higher prices for American consumers. The tariffs are paid by U.S. companies that import the products, and the companies are likely to pass the costs along to U.S. consumers in the form of higher prices.

The United States imports roughly $500 billion worth of Chinese goods each year, and - combined with existing tariffs - these new penalties would cover half of all goods sent to the United States from China.

The 10 percent tariff was scaled back from Trump's initial plan to impose 25 percent penalties on all of these imports. But the impact is still likely to be felt by millions of American consumers.

A White House spokesman did not immediately respond to a request for comment Saturday afternoon.

On Friday, deputy White House press secretary 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."

Trump's top advisers have been united behind his effort to push China to change its economic practices, but they have been divided on his tactics. Some have advocated a more cautious, diplomatic approach.

But Trump has signaled that he thinks only the threat of real economic pain will push Beijing to make major changes. He recently boasted that he thinks China's economy is suffering because of his tough policies.

Trump has accused China of a number of unfair trade practices. He wants China to take steps including buying more American products, opening itself up to more U.S. investment and ending what he says is its theft of U.S. intellectual property.

The tariffs come as a number of top White House advisers have been trying to de-escalate tensions between Trump and Chinese President Xi Jinping. Treasury Secretary Steven Mnuchin was planning to restart talks with China soon.

Chinese leaders have vowed to retaliate against any escalation of the trade battle with punitive steps of their own, and Trump's move could further push Beijing toward such action.

Trump's decision was first reported by the Wall Street Journal.

Trump has tried to use tariffs to penalize 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. The tactic has had mixed success.

Trump first imposed tariffs on roughly $50 billion in Chinese products this summer. The list of products mostly included industrial equipment to avoid directly hurting U.S. consumers.

China responded by imposing tariffs on U.S. products such as beef and soybeans, a response that spooked the U.S. agriculture industry and angered Trump and other White House officials. Trump ordered his advisers to come up with a list of $200 billion of other Chinese products to penalize, a package that includes many consumer products.

And two weeks ago, he said he was preparing a third package of penalties on what he said would be $267 billion of additional items, a list that is likely to encompass all remaining goods produced in China.

"For the near term, this combination of tactics seems to signal that unless and until China comes to the table with significant actions on the issues the U.S. is hammering, the U.S. will keep tariff pressure going," said Claire Reade, a former U.S. trade negotiator. "Talks without action won't do the trick. The open question, of course, is: How much action is enough, and can China find a way to move that will be seen as being in its own interest, not kowtowing to the U.S.?"

The United States ran a $233.5 billion deficit in goods trade with China in the first seven months of the year, an 8 percent increase over the same period in 2017.

Corporate executives increasingly think the trade dispute can be resolved only by direct talks between Trump and Xi. The two leaders may see each other at the United Nations General Assembly in New York this month and are scheduled to meet on the sidelines of the Group of 20 summit in Buenos Aires in November.

First published by The Washington Post.

Copyright © 2018, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
43°