Though there’s been talk of the U.S. and China making plans to come back to the negotiating table on trade, the two sides may yet be far from settling their differences.
On Wednesday, the Office of the United States Trade Representative said President Trump wants to escalate the most recent round of tariffs, hitting Chinese imports with a duty rate more than double what was initially proposed.
“This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent,” U.S. Trade Representative Robert Lighthizer said. “The 25 percent duty would be applied to the proposed list of products previously announced on July 10.”
The tariff plan that surfaced on July 10 included a new wave of $200 billion worth of tariffs on China. This followed the $50 billion in tariffs outlined earlier in the year—$34 billion of which has already been implemented, with the remaining $16 billion expected to follow in short order.
With the $200 billion worth of tariffs, goods including cotton, the majority of yarns used in textile production, woven and nonwoven fabrics, handbags and hats, would have faced new 10 percent duties. Now Trump wants to carry that duty rate up to 25 percent.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear about the specific changes China should undertake,” Lighthizer said. “Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
To offset the impact of China’s tariffs, the White House has planned for $12 billion in emergency aid for farmers, who are expected to start seeing payments as soon as September. The move has been met with disdain on the Hill among members of Congress who believe the solution lies in eliminating tariffs rather than offering up a bailout that may serve as little more than a bandaid.
In response, Trump said on Twitter last week, “China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S. They are being vicious in what will be their failed attempt. We were being nice—until now! China made $517 billion on us last year.”
The ultimate aim is to make China—which has promised to go toe-to-toe with the U.S. on tariffs—back down.
“The increase in the possible rate of the additional duty is intended to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizen,” Lighthizer said. “…and we remain ready to engage with China in negotiations that could resolve these and other problems.”
Based on what China makes as its next move, Trump has already said he’s prepared to impose tariffs on every item the U.S. brings in from China, covering the total $500 billion in trade. Though apparel and footwear have gone largely untargeted, they could be targeted in the next tranche.