Donald Trump threatens to expand trade war to all Chinese imports as US moves ahead with further tariffs
US President Donald Trump announced on Friday that his administration intends to go ahead with tariffs on US$200 billion worth of Chinese imports, the most dramatic escalation of the trade war between the two countries since tit-for-tat punitive duties began in July.
Speaking to reporters aboard Air Force One en route to Fargo, North Dakota, for a Republican fundraiser, Trump also breathed new life into threats he previously made to impose tariffs on the entirety of Chinese imports, which were worth over US$500 billion last year.
“Now we’ve added another US$200 billion,” Trump said during remarks that were initially off the record but which he later told reporters they could publish. “And I hate to say that, but behind that, there’s another US$267 billion ready to go on short notice if I want. That totally changes the equation.”
Trump did not indicate whether the office of the US trade representative (USTR) had reached a decision regarding the rate of taxation of the latest round of tariffs, originally proposed at 10 per cent.
Trade Representative Robert Lighthizer announced on August 1 that he was considering raising the rate to 25 per cent, at the direct request of the president.
US stocks fell after Trump’s remarks, with the Dow Jones down 0.59 per cent and the S&P 500 down 0.34 per cent, but trimmed their losses by the close, with the Dow losing .31 per cent and the S&P off .22 per cent.
China renewed vows this week to retaliate should the US go through with the latest round of proposed tariffs.
“If the US takes new trade measures against China … China will take necessary countermeasures,” commerce ministry spokesman Gao Feng said at a press conference on Thursday.
“Any measures pressuring China [to yield] will be ineffective, as the trade war can’t solve any problems.”
Despite its commitment to retaliate with countermeasures, China will not be able to match the new tariffs dollar for dollar, given that the country’s US imports constituted barely a third of its exports to the US, in terms of value.
Trump’s comments came after his senior economic adviser Larry Kudlow said in a morning interview that he thought China had “taken some missteps”.
Kudlow, director of the National Economic Council, told CNBC: “I don’t think they have joined the conversation with the kind of intensity I would like,” appearing to confirm that no substantive commitments were made during the last round of talks.
A Chinese delegation led by vice-minister of commerce Wang Shouwen visited Washington in late August at the invitation of the US Treasury’s undersecretary for international affairs, David Malpass.
Though both Washington and Beijing spoke positively about the talks after their conclusion on August 23, neither side announced any meaningful outcomes, which pundits and politicians alike had foreseen given the junior ranks of those involved.
A meeting of the countries’ leaders is not expected until Trump and his Chinese counterpart, Xi Jinping, meet at the G20’s November summit in Argentina to discuss trade issues.
Trump’s promise to go ahead with tariffs on US$200 billion of Chinese imports comes barely a day after the USTR brought the public comment period about the duties to a close.
Throughout a six-day hearing, more than 350 business leaders, industry association representatives and other experts appealed to the government not to go ahead with the punitive tariffs.
They cited damage to small and medium-sized US businesses and highlighted the increased costs to consumers that the duties will herald.
Including written comments, the USTR received over 3,200 remarks from individuals and companies about the latest round of tariffs, compared to 750 for the last round of tariffs on US$16 billion of Chinese imports, taxes that were not implemented for a full three weeks until after the public comment ended.
As the trade war has unfolded, Beijing has repeatedly expressed its willingness to engage in negotiations with the US.
But Kudlow said on Friday that China had failed to adequately respond to the Trump administration’s demands for “lower barriers, open markets [and for China to] quit stealing IP and technology”.
Speaking aboard Air Force One, Trump also suggested that further action on his part would depend on China’s next steps. “To a certain extent it’s going to be up to China,” he said.