President Trump has aimed fresh tariffs at China.
The planned tariffs that had been put on hold in June will now go into effect starting Sept. 1 at a rate of 10 percent to start, as negotiations continue between the U.S. and China to resolve their trade dispute.
In a tweet Thursday, Trump said the two countries had “constructive talks,” but that the U.S. will begin imposing a “small additional tariff of 10%” on the remaining $300 billion of imports from China.
Over two tweets explaining his reasoning, Trump said, “China agreed to…buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States–this never happened, and many Americans continue to die.”
The new 10 percent tariffs on $300 billion worth of goods, referred to as Tranche 4, will hit apparel, footwear and soft textiles.
This round of tariffs–which was initially supposed to be levied at the 25 percent rate–was put on hold on June 29 after Trump and Xi met at the G-20 summit in Osaka. That meeting also paved the way for the U.S. and China to restart negotiations over their trade dispute, though talks don’t seem to have moved far enough along.
Trump said in Thursday’s tweet: “We thought we had a deal with China three months ago, but sadly, China decided to renegotiate the deal prior to signing.”
The 10 percent rate, instead of 25 percent, may be the president’s way of keeping talks going at least a bit more positively than they might have otherwise.
A focal issue in the trade dispute for the U.S. centers on the protection of intellectual property assets of American companies.
When retailers reported first quarter results in May, some said another round of tariffs could result in higher prices for consumers, as they’d be forced to pass along some of the increase.
With a 10 percent tariff instead of the planned 25 percent, some retailers may be able to absorb a portion of the increase. There’s also a question of whether a pass along to consumers will result in shoppers pulling back their purse strings, leading to discounting in order to land a sale. Others brands, like Lululemon Athletica Inc., have alluded to plans to ship goods by air if tariffs took effect because of the risk of delays at the ports.
The imposition of tariffs, if talks can’t be settled before the Sept. 1 rollout, would come at a time when consumers are on the hunt for deals for back-to-school sales, and the impact could hamper the holiday shopping season, too.