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US plans more China tariffs if Trump-Xi meeting fails, sources say
[WASHINGTON] The US is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, three people familiar with the matter said.
An early-December announcement of a new product list would mean the effective date - after a 60-day public comment period - may coincide with China's Lunar New Year holiday in early February. The list would would apply to the imports from the Asian nation that aren't already covered by previous rounds of tariffs - which may be US$257 billion using last year's import figures, according to two of the people.
US officials are preparing for such a scenario in case a planned Trump-Xi meeting yields no progress on the sidelines of a Group of 20 summit in Buenos Aires in November, according to two of the people, who declined to be identified to discuss internal deliberations. They cautioned that final decisions had not been made.
The move indicates the Trump administration remains willing to escalate its trade war with China even as companies complain about the rising costs of tariffs and financial markets continue to be nervous about the global economic fallout.
US stocks fell heavily on Monday, with the S&P 500 flirting with a correction as technology shares tumbled, after the report that the Trump administration was set to press its trade war with China. The S&P 500 fell as much as 11 per cent from its all-time high before paring the drop in the final 15 minutes of trading. The Dow Jones Industrial Average slid more than 500 points at its worst, dipping into a correction before closing down 1 per cent. The Nasdaq 100 Index tumbled to the lowest level since May. The S&P 500 and Nasdaq indexes are on track for the steepest monthly declines of the record-long bull market.
The US this year has already imposed tariffs on US$250 billion in trade with China. Ten per cent tariffs on US$200 billion in imports that took effect in September are due to increase to 25 per cent on Jan 1. Trump has also threatened to impose tariffs on the remaining goods imports from China, which last year were worth US$505 billion.
"We are in the middle of a pretty nasty dispute. We're in a trade dispute - I want to use that word because it's a nice, soft word - but we're going to win," Mr Trump said on Saturday at an event in Indiana. "You know why? 'Cause we always win."
A request for comment from the White House was not immediately answered.
As another option, the White House is also considering excluding trade from the meeting agenda but it is unlikely to cancel it altogether, according to two people familiar with the matter.
White House Press Secretary Sarah Huckabee Sanders on Thursday said a meeting between Mr Trump and Mr Xi at the Nov 30-Dec. 1 summit was still in the planning stages.