Published: Mon, May 06, 2019
Markets | By Erika Turner

Trump threatens China with higher tariffs to reach trade deal

Trump threatens China with higher tariffs to reach trade deal

Trump tweeted Sunday that tariffs on $200 billion of Chinese goods will rise from 10 percent to 25 percent on Friday and that additional tariffs on $325 billion worth of now untaxed goods will be imposed at a rate of 25 percent "shortly".

Trump also said that he would soon impose a 25 percent tariff on an additional $325 billion of Chinese goods that have not yet been subject to the higher duties.

"The 10 per cent will go up to 25 per cent on Friday".

The US president originally imposed a 10 percent tariff on these goods in September that was due to rise in January, but postponed this as negotiations advanced.

Trump's shift-coming after weeks of encouraging talk that raised expectations that the two sides were inching toward a deal-threw into doubt the status of negotiations.

Treasury Secretary Steven Mnuchin, who made a quick trip to Beijing last week, has expressed optimism about the trade talks, which he said are in "final laps".

Mr Trump delayed further tariff increases earlier in the year, citing progress in talks.

Chinese officials are also expected to arrive in Washington for trade talks on Wednesday. Mr. Trump repeated a threat to raise the rate on existing tariffs and tax almost all of China's exports to the United States.

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But Michael Pillsbury, an informal trade adviser to Trump and the director for Chinese strategy at the Hudson Institute, said Kudlow's remarks downplayed the president's intent.

Once he took office, Trump's relationship with his Chinese counterpart, Xi Jinping, seemed to get off to a good start.

USA officials, including the president, have often said that while the talks have been going well it was still possible a deal would not be struck.

In the announcement on Twitter, Trump said that talks to secure a trade deal with China are continuing, but are moving "too slowly".

Wells Fargo Senior Economist Mark Vitner on the Trump administration trade negotiations with China and the state of the US job market.

"The Tariffs paid to the US have had little impact on product cost, mostly borne by China". The United States wants the tariffs to come off slowly, as China meets certain bench marks and it may keep tariffs on US$50-billion worth of goods in place indefinitely.

"Nobody in the business community likes the tariffs", he said.

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