President Trump on Monday announced tariffs on an additional $200 billion worth of Chinese products, piling on top of the $50 billion in tariffs previously enacted.
The massive escalation of the trade dispute may only be beginning, though, as Trump also threatened tariffs on $267 billion of goods on top of Monday’s announcements.
“If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports,” Trump said in a statement issued by the White House Monday evening.
[New: China announces $60 billion in new tariffs to retaliate against Trump’s escalation of trade dispute]
The tariffs in the latest round will go into effect on Sept. 24 and will be set at 10 percent initially, rising to 25 percent by next year, the same level as the previous $50 billion worth of goods.
Trump said that Chinese trade practices “plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” and called for Chinese leaders to “swiftly” change them. He also said that he hoped the trade war would ultimately be resolved by himself and Chinese president Xi Jinping.
“What the president has consistently indicated is that he will take what he regards as the appropriate measures necessary get China to change its actions and to treat Americans more fairly,” said a top administration official, discussing the possibility of a third round of tariffs, which would bring the total dollar amount of imports subject to levies to over half a trillion dollars. “To the extent that they remain unwilling to work with us, the president has other options and those will be considered at a future time.”
The administration’s total threatened tariffs would cover nearly all products imported from China, noted Brandon Arnold, executive vice president of the National Taxpayers Union. “We’re getting into pretty dangerous territory here, and it’s frustrating that we are doing that without a clear plan to get to trade liberalization,” Arnold said. Even if the administration does eventually cover almost all products coming from China, it still has other options to ratchet up the pressure, Arnold noted, by raising the tariff rates higher.
One category of wireless devices that includes several Apple products, such as the Apple Watch and AirPods, would be excluded. Competitors that make similar products will also be excluded. Administration officials said that the exemption was based on public comments made on the plan, including by the corporation. “We have the process that we have,” the official said, arguing it was based on “the evidence that was submitted.”
The announcement was made despite overtures from the administration to restart talks with China. Earlier this month Treasury Secretary Steven Mnuchin sent a letter to China’s Vice Premier Liu He proposing bilateral talks.
National Retail Federation President Matthew Shay said the country could not afford further escalation in the fight with China, especially with the Christmas season approaching. “The mere talk of tariffs on all remaining Chinese imports is of serious concern to retailers since tariffs of that magnitude would touch every aspect of American life,” Shay said.
Earlier this month, the administration completed two weeks of public hearings on the proposed $200 billion, allowing stakeholders to request exemptions.
The administration has also placed tariffs of 25 percent on steel imports and 10 percent on aluminum, both policies directed mainly at China.
