WASHINGTON/BEIJING – U.S. President Donald Trump sought to intensify pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.
U.S. Trade Representative Robert Lighthizer said Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet U.S. demands and has imposed retaliatory tariffs on U.S. goods.
“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 behaviour and adopt policies that will lead to fairer markets and prosperity for all of our citizens,” Lighthizer said in a statement.
There have been no formal talks between Washington and Beijing for weeks over Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.
Two trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a “fruitful negotiation” is possible. “We don’t have anything to announce today about a specific event, or a specific round of discussions, but communication remains open and we are trying to figure out whether the conditions present themselves for a specific engagement between the two sides,” one of the officials said.
Derek Scissors, a China scholar at the American Enterprise Institute in Washington, told media that a 25 percent tariff rate is more likely to shut out Chinese products and shift American supply chains to other countries, as a 10 percent duty could be offset by government subsidies and weakness in China’s yuan currency.
“If we’re going to use tariffs, this gives us more flexibility and it’s a more meaningful threat,” he said, adding that Trump’s pressure strategy will not work if he does not resolve trade disputes with U.S. allies such as the European Union, Mexico and Canada.
But the move drew swift condemnation from U.S. business lobby groups worried that tit-for-tat tariffs would start to hamper economic growth.
“Escalating tariffs against China is the wrong approach to address legitimate concerns U.S. businesses have with China’s harmful practices,” said Myron Brilliant, head of international affairs for the U.S. Chamber of Commerce.
“Each tariff escalation leads to further retaliatory action from China ultimately inflicting even more harm on American businesses, workers, farmers, ranchers, and consumers.”