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Trump to back US$200b China tariffs as early as next week
PRESIDENT Donald Trump wants to move ahead with a plan to impose tariffs on US$200 billion in Chinese imports as soon as a public-comment period concludes next week, according to sources.
Asked to confirm the plan in an interview with Bloomberg News in the Oval Office on Thursday, Mr Trump smiled and said it was "not totally wrong". He also criticised management of the yuan, saying that China has devalued its currency in response to a recent slowdown in economic growth.
Companies and members of the public have until Sept 6 to submit comments on the proposed duties, which cover everything from selfie sticks to semiconductors. The president plans to impose the tariffs once that deadline passes, according to the sources. Broadening the tariff battle would mark the most significant move yet in a months-long trade standoff and dent China's growth prospects.
"China is more prepared, mentally, this time than it was for the previous round of tariffs," said Gai Xinzhe, an analyst at the Bank of China's Institute of International Finance in Beijing. "The scale is enormous and once the tariffs materialise, they will definitely send jitters through financial markets."
Such unease was already on display on Friday with Asian and European stocks declining, and US equity futures pointed to a dip at the open. The yen held on to gains. The tariff news exacerbated already fragile market sentiment amid currency routs in Argentina and Turkey.
Some of the sources cautioned that Mr Trump hasn't made his final decision, and it's possible the administration may enact the duties in instalments. The US has so far imposed levies on US$50 billion in Chinese goods, with Beijing retaliating in kind.
It's also possible the president could announce the tariffs next week, but say they will take effect at a later date. The Trump administration waited about three weeks after announcing in mid-June that it was imposing tariffs on US$34 billion of Chinese goods before they were implemented. The next stage of tariffs on US$16 billion of goods took hold in August.
China has threatened to retaliate by slapping duties on US$60 billion of US goods.
Tensions with the US may be helping bring Japan and China closer together. The nations' finance ministers agreed in Beijing on Friday that protectionist policies aren't in anyone's interest and they would support and promote the multilateral trading system. The previous day, Japan's Finance Minister Taro Aso discussed US trade with China's Vice-Premier Liu He, who led a previous round of negotiations with the US.
The Trump administration is finalising the list of Chinese targets and tariff rate, which could range from 10 per cent to 25 per cent. Mr Trump's plan to bring down his biggest hit yet on China comes as two-way trade talks show little signs of progress. BLOOMBERG