The White House ratcheted up the trade war rhetoric with Beijing on Sunday by claiming that President Trump was considering placing even higher tariffs on Chinese goods. The comments were meant to clarify remarks made by Trump earlier Sunday in which he claimed “second thoughts” regarding a tariff increase he ordered on Chinese goods.
Treasury Secretary Steven Mnuchin also said Sunday that China was now an “enemy” of the United States on trade.
White House economic adviser Larry Kudlow said Trump’s comments that appeared to indicate he might back away from upping the tariffs were anything but that.
“He didn’t exactly hear the question. Actually, what he was intending to say is he always has second thoughts and actually had second thoughts about possibly a higher tariff response to China,” Kudlow told CNN. “It was not to remove the tariff.”
Kudlow was referring to a response Trump made Sunday to a reporter during a meeting with U.K. Prime Minister Boris Johnson. Asked if he had had “second thoughts” about ordering an increase in Chinese tariffs, Trump said, “Yeah, sure. Why not?” Trump said later, “I have second thoughts about everything.”
In a further example of the escalating trade war rhetoric, Mnuchin told Fox on Sunday that while Chinese President Xi Jinping was still Trump’s “friend” on a personal level, “as it relates to financial issues and trade, we have become enemies. We’re not making progress.”
The U.S. Trade Representative’s Office announced Friday that existing tariffs on $250 billion worth of Chinese goods will go to 30% effective on Oct. 1, up from the current rate of 25%. Planned tariffs on an additional $300 billion worth of goods will be 15%, up from their previously announced level of 10%. The combined $550 billion worth of goods cover most imports from China.
The increase followed an announcement by Beijing earlier Friday that was enacting additional tariffs of 5% and 10% on $75 billion worth of U.S. goods. It will also place a 25% tariff on American automobiles and a 5% duty on auto parts.
Trump on Friday called on U.S. businesses to immediately find alternative sources for any goods they were importing from China.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” the president tweeted.
Kudlow said on Sunday, however, that the administration was not asserting any kind of executive authority to fully prohibit trade with China, though he argued it could if it wanted.
“Ultimately we do have such authority, but it is not going to be exercised presently,” the economic adviser said.
