Donald Trump steps up trade war with China with $200 BILLION import tariffs
The US President is hoping to increase pressure on Beijing
DONALD Trump has stepped up the trade war with China by announcing he will raise tariffs on $200billion (£152billion) of Chinese goods.
The US President is hoping to increase pressure on Beijing after complaining talks on a US-China trade deal are moving "too slowly".
He tweeted that tariffs of 10 per cent on certain goods would rise to 25 per cent on Friday, and $325bn of untaxed goods could face 25 per cent duties "shortly".
The move marked a major escalation in trade tensions between the world's two largest economies and a shift in tone from Trump, who cited progress in talks as recently as Friday.
The Wall Street Journal reported on Sunday night that China was considering cancelling this week's trade talks in Washington in light of Trump's comments that took Chinese officials by surprise.
US officials did not immediately know if China would attend and the US Trade Representative's Office did not immediately comment.
A roughly 100-person Chinese delegation had been expected to accompany Chinese Vice Premier Liu He for the talks, according to one Trump administration official.
US Treasury Secretary Steven Mnuchin described last week's round in Beijing as "productive."
A less than rosy update from US Trade Representative Robert Lighthizer, including details that China was pulling back from some commitments, prompted Trump's jab on Twitter at Beijing, officials said.
PROGRESS 'TOO SLOW'
"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump said in a tweet.
Financial markets reacted negatively.
S&P 500 e-minis were down 54.75 points, or 1.86 per cent, while Nasdaq 100 e-minis were down 168 points, or 2.14 per cent, and Dow e-minis were down 484 points, or 1.83 per cent.
Trump said tariffs on $200 billion of goods would increase to 25 per cent on Friday from 10 per cent, reversing a decision he made in February to keep them at the 10 per cent rate after progress between the two sides.
TRADE WAR
The President also said he would target a further $325 billion of Chinese goods with 25 per cent tariffs "shortly," essentially targeting all products imported to the United States from China.
Trump wants to keep some, if not all, of the existing tariffs on China as part of any final trade deal to ensure China lives up to its commitments, a White House official said on Sunday.
Mindful of his 2020 re-election bid, Trump suggested the measures were not leading to price increases for US consumers.
"The Tariffs paid to the USA have had little impact on product cost, mostly borne by China," he tweeted.
Tariffs on Chinese goods are actually paid to the US by the companies importing the goods.
Most of those companies are US-based.
American businesses, while largely supportive of Trump's crackdown on China's trade practices, are eager for the tariffs to be lifted, not increased and expanded.
"Raising tariffs means raising taxes on millions of American families and inviting further retaliation on American farmers," said Christin Fernandez, a spokeswoman for the Retail Industry Leaders Association.
AGGRESSIVE MOVE
Nevertheless, the president's aggressive strategy drew rare bipartisan support from US Senate Democratic leader Chuck Schumer.
He urged Trump to "hang tough" in a tweet: "Don’t back down. Strength is the only way to win with China."
Trump's announcement cast doubt on earlier expectations that China and the US
United States were closing in on a deal to end a trade war that has slowed global growth and disrupted markets.
"It's obviously not good news for the market. The administration had sent signals an agreement was close before,” said Rick Meckler, a partner at Cherry Lane Investments in New Jersey.
“This causes us to question how close we are.”
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As recently as Friday, Trump said talks with China were going well.
Mnuchin expressed hope last week that the Beijing and Washington rounds would lead US advisers to a recommendation to Trump on whether a deal was reachable.
And a White House official told Reuters that dates were being looked at in June for a potential meeting between Trump and Chinese President Xi Jinping.