Complaining about a lack of progress in ongoing Sino-American trade talks, US President Donald Trump announced on Sunday that his country would raise tariffs on $200 billion of Chinese goods from 10% to 25%.
Trump’s action came as a major Chinese delegation is expected to arrive in Washington Wednesday for the latest round of talks to end the trade war between the world’s two biggest economies. It has been billed as the last one and officials hope it will lead to an agreement to end the conflict.
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump tweeted.
“The 10% will go up to 25% on Friday,” he said.
The two sides have imposed tariffs on $360 billion in two-way trade since last year. But Trump and China’s President Xi Jinping agreed in December to refrain from further escalation.
As recently as last week, the US had depicted the trade talks as going smoothly.
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted Sunday.
….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!
— Donald J. Trump (@realDonaldTrump) May 5, 2019
Not everyone is convinced Trump really intends to impose the hike on Friday. Tom Orlik, chief economist at Bloomberg Economics, suggested that his tweet may simply be a negotiation tactic.
“It’s possible talks are breaking down, with China offering insufficient concessions, and an increase in tariffs a genuine prospect.
“More likely, in our view, is that this renewed threat is an attempt to extract a few more minor concessions in the final days of talks.”
Trump says he wants to cut the massive US trade deficit with China, which in 2018 totaled $378.73 billion if trade in services is included.
In addition to greater access to the Chinese market for US goods, Trump is pushing for structural changes such as Beijing ending its practice of forcing American companies that operate in China to share their technology.
Trump is also demanding that China stop intellectual property theft and subsidies to state-owned companies.
To turn up the heat on Beijing, Trump has even threatened to impose tariffs on all Chinese products entering the US, which were worth $539.5 billion last year.
The Trump administration hiked tariffs on about half of its imports from China last year, while Beijing retaliated with tariffs on more than 70% of its imports from America, according to tracking by Chad Bown, a senior fellow at the Peterson Institute for International Economics.
Those tariffs have put pressure on businesses that source and sell products in the two countries.
Trump said on Sunday that his tariffs have had little impact on product costs in the US and have been “mostly borne by China,” an argument rejected by most economists. Recent studies have shown that tariffs are being passed on to American consumers in the form of higher prices on imported products.
American businesses say they agree with the administration’s efforts to push for a more level playing field in China, but they also say the tariffs have hit them hard, Tim Stratford, the chairman of the American Chamber of Commerce in China, told The New York Times.
“Nobody in the business community likes the tariffs,” he said. “They hurt the people that impose them just as much as people they are imposed on.”
– with reporting by AFP, the BBC and The New York Times