President Donald Trump today asked his top trade negotiator to consider increasing the pain from proposed new tariffs on $200 billion of Chinese goods, raising the rate from 10 percent to 25 percent.
The announcement marks a potential escalation in the tit-for-tat trade war that is grounded in Trump’s persistence that China change its ways of appropriating U.S. intellectual property, either through forced technology transfer agreements with U.S. companies or outright theft.
On July 6, the U.S., after failed talks in Beijing and Washington, announced it would be levying 25 percent tariffs on $34 billion worth of Chinese goods, with a promise to bring that up to $50 billion. China announced an equivalent retaliation the same day. While the U.S. tariffs were placed mainly on high-tech products coming from China, the Chinese tariffs were aimed mainly at a wide variety of U.S. farm commodities, such as soybeans, wheat, corn, almonds, oranges and cherries.
Less than a week later, Trump announced that he planned to retaliate on the Chinese retaliation by taxing an additional $200 billion worth of Chinese goods. The rate was set at 10 percent for the proposed $200 billion that could go into effect as early as September, according to senior administration officials.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition,” U.S. Trade Representative Robert Lighthizer said in a statement. “We have been very clear about the specific changes China should undertake. Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
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Trump has promised to increase the tariffs yet again on another $200 billion in Chinese products, bringing the total to $450 billion, if China retaliates again.
Senior administration officials who briefed reporters did not go into detail on the reason for the proposed hike to the tariff rate other than to give the president more leverage in negotiating with China.
“The increase in the possible rate of the additional duty is intended to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens,” Lighthizer said.
Senior administration officials said today the U.S. is willing to negotiate with China, but no such talks are being planned now.
Lighthizer told lawmakers in a Senate hearing last week the U.S.-China trade war could drag on for years.
“I think some issues will be dealt with shortly … and I think, directionally, we’re going to have a problem with China that’s going to go on for years,” he said.
Also last week, the USDA unveiled the outline of a $12 billion aid program for farmers suffering from retaliatory tariffs.
