Trade Tensions Tighten With Call for Extra $100B in Tariffs

President Trump 'ups the ante' by suggesting US Trade Representative to increase tariffs against China by another $100 billion. ( MGN )

(Bloomberg) -- President Donald Trump ordered his administration to consider imposing tariffs on an additional $100 billion in Chinese imports, a salvo that sent U.S. stock futures tumbling on concern the world’s two largest economies were hurtling toward a full-blown trade war.

The move threatens to unravel efforts by top U.S. and Chinese trade officials to lower the heat and reach an agreement that could stave off an escalating conflict.

“In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said in a statement issued by the White House.

A White House official later said the $100 billion figure Trump used in the statement referred to the value of the imports that would be covered by the additional tariffs, not the total amount of tax that would be charged on the products.

Xinhua, China’s state news agency, said Friday that Beijing vowed to defend its interests "against new U.S. actions."

China said Wednesday it would levy a 25 percent tariff on about $50 billion of U.S. imports including soybeans, automobiles, chemicals and aircraft. That was in response to the release by the U.S. of a list of proposed tariffs a day earlier, covering $50 billion in Chinese products.

U.S. Trade Representative Robert Lighthizer quickly followed up on Trump’s Thursday evening declaration with a statement of his own stressing that none of the tariffs would take immediate effect. The administration hasn’t said when any of the proposed tariffs would go into force.

He said that any additional tariffs first would be subject to a 60-day public comment period, as would the penalties announced earlier in the week.

“No tariffs will go into effect until the respective process is complete,” Lighthizer said.

Trump chief economic adviser Larry Kudlow and other administration officials have spent the past two days trying to tamp down fears of a trade war.

“I think we’re going to come to agreements,” Kudlow said Wednesday on Fox News. “I believe that the Chinese will back down and will play ball.”

Yet Trump signaled a harder line in a speech earlier Thursday, saying it is time to stop China from “taking advantage” of America.

 

Copyright 2018, Bloomberg

Comments