President Donald Trump is set to announce new tariffs on some $200 billions in Chinese goods as early as next week in a move that could risk deepening the trade war between the two economic powers. Sources told the Wall Street Journal an announcement is being planned for Monday or Tuesday. The move would amount to “one of the most severe economic restrictions ever imposed by a U.S. president,” points out the Washington Post.
The tariffs would take effect within weeks and would be lower than initially expected. Although the administration had said it was considering a tariff level of 25 percent, it will probably be about 10 percent. But officials warned Trump could decide to hike the tariff level up to 25 percent again if he feels China isn’t showing progress to change its economic policies.
The lower tariff level appears to have been a result of administration officials being swayed by the public hearings on the issue and fear that the tariffs could end up increasing prices on American consumers ahead of the holiday shopping season. It’s still far from clear how much prices could increase in the United States as a result of the new tariffs. But Apple had recently warned some of its products would inevitably increase in price if the trade war between China and the United States escalates.
Word of the tariffs comes mere days after Trump wrote on Twitter that China is “under pressure to make a deal with us,” implying Beijing would be the one to lose out if there was no progress in negotiations. “Our markets are surging, theirs are collapsing. We will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?”
The way in which Trump appears to have decided to move forward with the new tariff even as he authorized aides to try to begin new negotiations with China reflects “divisions in his administration over handling escalating trans-Pacific trade tensions, with some urging an ongoing tough line and others hoping to keep open a dialogue that could foster compromises before the spat turns into a full-fledged trade war,” notes the Journal. But analysts also pointed out the new tariffs appear to be part of a move to make clear to China that Washington wants more than just talks and negotiations.
“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,” Claire Reade, a former U.S. trade negotiator, tells the Washington Post. “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.”