Donald Trump Orders Tariff Rises On Remaining Chinese Imports

Fredrick Soto
May 14, 2019

It's certainly possible in principle that the exporter - in this case Chinese enterprises - could "pay" by having to accept a lower price for good, so that the total cost to the importer was unchanged. After Friday's increase, the administration is now imposing 25% tariffs on $250 billion in Chinese goods.

China's Commerce Ministry has threatened to retaliate to the tariff increase but has not announced how it plans to do so.

While Trump casts his tariffs as being paid for by China, they actually are paid by the American companies that bring a product into the U.S. This can help some U.S. producers, though, because it makes their goods more competitive pricewise.

But President Donald Trump tweeted that the talks had been candid and constructive, adding tariffs on China may or may not be removed depending on what happens with respect to future negotiations. Some of them are theft in intellectual property, forced transfer of technology and the rollback of tariffs. Trump had delayed the tariffs as negotiations between Washington and Beijing were progressing.

Trump has ordered Lighthizer to begin imposing tariffs on all remaining imports from China, a move that would affect about an additional $300 billion worth of goods.

Trump showed confidence in his decision to levy tariffs by tweeting: "Tariffs will make our Country MUCH STRONGER, not weaker".

US Treasury Secretary Steven Mnuchin and Lighthizer met for about two hours with Liu on Friday and then headed for the White House to brief Trump, who had said he was in no hurry to reach a deal, arguing the United States was negotiating from a position of strength.

Sources told Reuters this week that China had deleted its commitments in the draft agreement that said it would change laws to resolve core complaints of the United States: theft of USA intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

"We think there are a lot of options as far as extension or asking for a new investigation, but this does seem something that hasn't gotten a lot of press given the situation with China", she said.

"Trump's hazard makes moving ahead with talks" very hard politically" for Xi's government, said Jake Parker, vice president of this U.S.

Yang Delong, chief economist at First Seafront Fund Management in Shanghai, told AFP that the "sudden hardening" of Trump's tone is likely linked to the 2020 presidential election.

Liu's comments clashed with those of US Treasury Secretary Steve Mnuchin, who told broadcaster CNBC on Friday that there were now no trade talks scheduled with Beijing.

The Global Times said the US is wrong in "believing China is unilaterally benefitting from China-US economic and trade relations".

His trashing of existing and proposed trade agreements grabbed the headlines, but he also made clear his view that globalization had been bad for America and that he would use tariffs to protect national security and domestic producers. Mnuchin added no more talks planned for now.

The interview came less than a day after the Trump administration hiked tariffs on $200 billion worth of Chinese goods. "China would greatly slow down, and we would automatically speed up!" Trump gave U.S. importers less than five days notice about his decision to increase the rate on the $200 billion category of goods, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods.

"The question is can the Chinese come back and offer enough such that Trump can sell it?" he said.

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