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US tipped to raise China trade tariffs further

August 1, 2018

According to US media reports, the Trump administration is on the brink of announcing a 25 percent tariff rate on $200 billion worth of Chinese goods. That would represent a drastic escalation of the US-China trade spat.

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China Qingdao - Containerhafen
Image: picture-alliance/dpa/Imaginechina/Y. Fangping

US President Donald Trump is now considering a 25 percent tariff on up to $200 billion (€171 billion) worth of Chinese imports, according to media reports in the US.

Sources close to the internal US deliberations told both Bloomberg and the Washington Post that the Trump administration is considering what would be a significant escalation of the current tariff regime against China, which currently stands at 25 percent on $34 billion worth of primarily industrial goods, in place since early July.

In June, Trump directed the US Trade Representative to prepare fresh tariffs on an additional $200 billion worth of Chinese imports, with a rate of 10 percent touted. This wave of tariffs would include a wide range of products, from dog food to furniture, bicycles to beauty products.

However, three separate sources told the aforementioned US media outlets that the administration is considering raising that rate to 25 percent in the near future, and possibly as early as Wednesday.

Read more: China matches US's $50 billion tariff threat

Meanwhile, after the initial $34 billion worth of tariffs came into effect last month, a review of an additional $16 billion worth of tariffs on just under 300 separate products was initiated, with the deadline for public comments on those coming on Tuesday, July 31. It has typically taken several weeks after the closing of public comments for tariffs to be formally activated.

Tensions rise amid hopes for formal negotiations 

The reports from Washington indicate a further ramping up of the pressure in the trade dispute between China and the US.

China defends trade practices at WTO trade policy review

In response to the reports, the Chinese government warned of retaliation.

Chinese Foreign Ministry spokesman Geng Shuang said Beijing was ready for "dialogue and consultation" on the issue, but added that "if the United States takes further measures that escalate the situation, China will definitely fight back."

News of a possible 25 percent rate on $200 billion worth of goods comes alongside economic data from Beijing showing that growth in China's industrial sector is at its slowest pace in eight months, on the back of declining export orders.

Read more: China's falling yuan stokes currency tensions

Negotiations between the countries are currently officially on hold but Bloomberg reports that US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are holding private conversations with a view to re-establishing formal negotiations as soon as possible.

The trade dispute with China has been a signature issue of the Trump presidency so far. The US President has repeatedly vowed to cut the US trade deficit with China, with stood at $376 billion in 2017.

aos/kd (AFP, Reuters, dpa)