US President Donald Trump announced Sunday that the United States will raise tariffs on $200 billion of Chinese goods — a blunt warning to Beijing just days before what is being billed as a last-ditch round of talks to reach a deal or resume their trade war.
To press China even more to accept US demands, Trump also threatened again to impose tariffs on all Chinese imports to the US — worth $539.5 billion last year.
China is now considering canceling the next round of talks scheduled to start Wednesday in Washington, The Wall Street Journal reported, citing a person briefed on the matter.
“China shouldn’t negotiate with a gun pointed to its head,” the newspaper quoted the source as saying, adding that a final decision had not been made.
Trump said he is raising some tariffs because the trade talks are going “too slowly.”
“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.
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. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars…. — Donald J. Trump (@realDonaldTrump) May 5, 2019
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. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019
“The 10% will go up to 25% on Friday.”
Following Trump’s announcement, Hong Kong and Shanghai stocks tumbled in the first few minutes of trade on Monday.
The Hang Seng Index plunged 2.4 percent, the benchmark Shanghai Composite Index dived 3.0 percent and the Shenzhen Composite Index — which tracks stocks on China’s second exchange — sank 3.7 percent.
The two sides have imposed tariffs on $360 billion in two-way trade since last year. But Trump and Chinese leader Xi Jinping agreed to a truce in December to refrain from further escalation.
As recently as last week, the US had depicted the trade talks as going well.
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump complained.
Trump says he wants to reduce the huge US trade deficit with China, which in 2018 totaled $378.73 billion with services trade included.
Besides a greater opening of the Chinese market to US goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing US companies that operate in China to share their technology.
Trump is also demanding that China halt intellectual property theft and subsidies to state-owned companies.
The US president has insisted throughout the process that he will not accept a watered-down trade accord. And his administration warned recently that trade talks could not simply go on forever.
