In shift, Trump vows tariff hike on Chinese goods ahead of next trade talk round

By Jeff Mason and Timothy Gardner

 

FILE PHOTO: U.S. President Donald Trump answers a question during an Oval Office meeting with Slovakia’s Prime Minister Peter Pellegrini at the White House in Washington, U.S. May 3, 2019. REUTERS/Jonathan Ernst/File Photo

 

WASHINGTON (Reuters) - President Donald Trump on Sunday dramatically increased pressure on China to reach a trade deal by announcing he will hike U.S. tariffs on $200 billion (152 billion pounds) worth of Chinese goods this week and target hundreds of billions more soon.

 

The announcement via Twitter marks a major shift in tone from Trump, who has cited good progress in the talks and praised his relationship with Chinese President Xi Jinping. Any sign of an escalation in the months-long trade war is almost sure to roil financial markets, which have reacted sensitively to developments in the talks between the world's two largest economies.

 

Trump's announcement comes ahead of another round of talks between U.S. and Chinese officials in Washington scheduled for this week. White House officials were unaware on Sunday afternoon whether the tweet would affect those talks. The Chinese delegation could decide not to come because of what is likely to be seen as an escalation by the president.

 

Trump's move is a reversal of his decision in February not to increase tariffs from 10 percent to 25 percent on $200 billion of goods, thanks to progress in the trade talks. That increase will now go into effect on Friday, Trump said in a tweet.

 

The president also said he would target another $325 billion of Chinese goods with 25 percent tariffs "shortly" and he suggested that the measures were not leading to price increases for American consumers.

 

"The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump said.

 

Tariffs on Chinese goods are paid to the United States by the companies importing the goods; most of those companies are U.S.-based.

 

The announcement casts doubt on expectations that China and the United States were closing in on a deal to end a trade war that has slowed global growth and disrupted markets.

 

Chinese Vice Premier Liu He was due to travel to Washington for talks this week after a round last week in Beijing that Treasury Secretary Steven Mnuchin called "productive."

 

As recently as Friday, Trump said talks with China were going well.

 

White House economic adviser Larry Kudlow told Fox News that the president's tweet was a warning to the Chinese.

 

"The president is, I think, issuing a warning here, that, you know, we bent over backwards earlier, we suspended the 25 percent tariff to 10 and then we’ve left it there. That may not be forever if the talks don’t work out," he said.

 

But Michael Pillsbury, an informal trade adviser to Trump and the director for Chinese strategy at the Hudson Institute, said Kudlow's remarks downplayed the president's intent.

 

"I take the president's tweet at face value. I was disappointed that Larry Kudlow downgraded it to a mere warning, which may tend to undermine American credibility as the Chinese delegation prepares its position" ahead of this week's scheduled talks, he said.

 

Despite Mnuchin's more upbeat interpretation of the last negotiating round, Pillsbury said he assumed Trump's tweet came after a more sobering update from U.S. Trade Representative Robert Lighthizer, including information that China had walked back from some things to which it had previously agreed.

 

Last week, industry sources said they believed the talks were in the endgame, and Mnuchin had said he hoped that the U.S. negotiating team would soon be able to recommend a deal to Trump or tell him that one could not be reached.

 

The administration has been insisting on a mechanism to ensure that China follows through on any promises to purchase more American goods.

Administration officials have said both sides are expected to launch new enforcement staffs to police the agreement.

 

(Additional reporting by Lawrence Hurley; editing by Lisa Shumaker and Bill Berkrot)

 

-- © Copyright Reuters 2019-05-06

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Here comes another price hike thanks donald

"Trade wars are good and easy to win"

A price hike on Chinese junk?

As his negotiating skills made such an impact on North Korea, so they will with China.

 

Aren't we tired enough of all this winning?

13 minutes ago, Longcut said:

A price hike on Chinese junk?

 

Not only on junks, but also on other types of boat made in China.

1 hour ago, Tug said:

Here comes another price hike thanks donald

If it stops Americans from buying Chinese made goods, so much the better. How many big screen TVs, refrigerators, smartphones, and tacky electronics and cheap clothes do people need? Consumerism is an addiction. Something needs to happen to get Americans to save instead of running themselves into maxed out credit cards and constant refis. But don't worry, I'll bet Trump backs down. He always does. And he is such a narcissist who has entwined his sense of self identity into the stock market so much that any downturn in futures will have him bragging about the "biggest deal evah" he is going to make with China in a few days. 

Does anybody shop at Walmart?that is a major outlet for Chinese goods they also treat their employs like c#@& that being said we all buy things made in China every day it will now cost more

8 minutes ago, Tug said:

Does anybody shop at Walmart?

Yep

17 minutes ago, Tug said:

Does anybody shop at Walmart?that is a major outlet for Chinese goods they also treat their employs like c#@& that being said we all buy things made in China every day it will now cost more

Yup, but only when I absolutely have to.  

It is disconcerting that Trump has the authority to increase tariffs whilst being utterly clueless about how they work.

 

"Donald Trump claims China pays for higher tariffs, but economists say it's U.S. companies and consumers who pay"

 

https://www.newsweek.com/china-tariffs-donald-trump-larry-kudlow-who-pays-us-companies-economic-trade-1415469

4 minutes ago, Oxx said:

"Donald Trump claims China pays for higher tariffs, but economists say it's U.S. companies and consumers who pay"

Not if they don't buy anything from China. Which is the entire point!

2 hours ago, Tug said:

Here comes another price hike thanks donald

On the other thread(the one about stunning job increases and no "magic wand needed") we learn the record job numbers are a bad thing because of the trade deficit and Trump is bad. And now here we have Trump doing his best to start addressing the huge trade deficit - which surprise surprise is also a bad thing, and Trump is bad. One gets the feeling that objectivity is sorely lacking.

15 minutes ago, TopDeadSenter said:

On the other thread(the one about stunning job increases and no "magic wand needed") we learn the record job numbers are a bad thing because of the trade deficit and Trump is bad. And now here we have Trump doing his best to start addressing the huge trade deficit - which surprise surprise is also a bad thing, and Trump is bad. One gets the feeling that objectivity is sorely lacking.

Not so, some of the concerns are adding up to make for a potential big problem.   We've seen it before and it's time to heed the warning signs. 

This is worth a read:

https://www.bloomberg.com/opinion/articles/2019-05-03/trump-s-economy-could-mimic-george-w-bush-s?fbclid=IwAR0M_G1PNtwwF84UZdQmXoxBuF3K-yDog0YdROwDmpfz3Ep8s1BMy146DUI

 

 

24 minutes ago, TopDeadSenter said:

And now here we have Trump doing his best ...

 

You've hit the nail on its head.  Trump "doing his best" is ineffective at best and counterproductive at worst (in support of this point, I refer you to all the winning).  We need something other than "Trump doing his best".

37 minutes ago, zydeco said:

Not if they don't buy anything from China. Which is the entire point!

I don’t think that is possible the way trade is structured today

The conman is at it again, pretending to be tough on Chinese, but actually Increasing cost burden on Americans. While American farmers nosedive to bankruptcy from earlier tariffs increase.

53 minutes ago, TopDeadSenter said:

On the other thread(the one about stunning job increases and no "magic wand needed") we learn the record job numbers are a bad thing because of the trade deficit and Trump is bad. And now here we have Trump doing his best to start addressing the huge trade deficit - which surprise surprise is also a bad thing, and Trump is bad. One gets the feeling that objectivity is sorely lacking.

Quite so, a stunning job increase. If he can just put a little bit more effort in he may be able to raise his monthly average to that of Obama's last two years.

1 hour ago, TopDeadSenter said:

On the other thread(the one about stunning job increases and no "magic wand needed") we learn the record job numbers are a bad thing because of the trade deficit and Trump is bad. And now here we have Trump doing his best to start addressing the huge trade deficit - which surprise surprise is also a bad thing, and Trump is bad. One gets the feeling that objectivity is sorely lacking.

The only impact of Trump's tariff policy so far has been a huge increase of trade deficit with China. 419 billion in 2018 compared to 347 in 2016. It looks good to address the trade deficit issue, but it's better to do it in a competent and efficient way.

https://www.census.gov/foreign-trade/balance/c5700.html

Chinese know the stock market is Trump's Achilles heal. Maybe they are selling futures on exchanges today as S&P futures are down about 1.8% right now. 

 

2 hours ago, zydeco said:

If it stops Americans from buying Chinese made goods, so much the better.

Those goods are imported by US importers and sold by US businesses. If Americans stop buying because the cost for similar US-made products becomes unaffordable due to the higher tariffs PAID by US importers and passed through to the consumer, American wholesale and retail businesses will likely collapse, employees laid off.

Horse   stable door

3 hours ago, webfact said:

"The Tariffs paid to the USA have had little impact on product cost, mostly borne by China.

This is the most inaccurate, if not insane, economic drivel.

Import tariffs are born by the importing nation.

https://www.newsweek.com/china-tariffs-donald-trump-larry-kudlow-who-pays-us-companies-economic-trade-1415469

1 hour ago, TopDeadSenter said:

On the other thread(the one about stunning job increases and no "magic wand needed") we learn the record job numbers are a bad thing because of the trade deficit and Trump is bad. And now here we have Trump doing his best to start addressing the huge trade deficit - which surprise surprise is also a bad thing, and Trump is bad. One gets the feeling that objectivity is sorely lacking.

Wrong. I and others have continued to argue for tariffs. My fear is that Trump will cave. And I'm still not sure if this is nothing more than a last minute negotiating ploy, so he can more easily sell giving in to Chinese demands. On the other hand, in a perverse way, it could be that Joe Biden has finally helped us get the tariffs we need (actually we need a trade embargo on China). Because Biden essentially revealed himself as a Chinabot in the pocket of Beijing paymasters--along with his son--who is willing to sell out Americans to Chinese Communist dictators, Trump or his advisers may just have seen an opening for the 2020 election. With Chairman Joe as the puppet of Chairman Xi, it will be impossible for Biden to win back those Rust Belt states that went for Trump in 2016. But I still think Trump is a coward who will cave. His word is worthless--on just about everything. So, yes, the tariffs would be a good thing, and I hope they are put in place. But I'm not counting on it.

36 minutes ago, Kasane said:

Chinese know the stock market is Trump's Achilles heal. Maybe they are selling futures on exchanges today as S&P futures are down about 1.8% right now. 

 

The Chinese markets are down 3.5-4%. See how that works? Any intelligent investor knows this means stock are on sale and slightly down from record highs. 

29 minutes ago, Srikcir said:

American wholesale and retail businesses will likely collapse, employees laid off.

Just in case you haven't noticed, retail is already collapsing. And it has nothing to do with tariffs. Just look at the latest jobs report everyone got so excited about. Retail jobs slashed as malls and retail outlets continue to close. Amazon is coming. And it doesn't need people anymore. Just robot repair technicians. So, your scenario is going to happen, no matter what. Better reacquire then some of the jobs outsourced to China (and India) or you will have blood in the streets. 

1 minute ago, zydeco said:

Just in case you haven't noticed, retail is already collapsing. And it has nothing to do with tariffs. Just look at the latest jobs report everyone got so excited about. Retail jobs slashed as malls and retail outlets continue to close. Amazon is coming. And it doesn't need people anymore. Just robot repair technicians. So, your scenario is going to happen, no matter what. Better reacquire then some of the jobs outsourced to China (and India) or you will have blood in the streets. 

But I thought we were going to all get welfare checks so we can stay home and play video games. Am I missing something?

Like a rabid dog, convinced the world is against him, Trump blindly lashes out again.  

5 minutes ago, ballpoint said:

Like a rabid dog, convinced the world is against him, Trump blindly lashes out again.  

There is probably nearly a trillion dollars that changed hands tonight and you just don’t get it. C’mon man.

4 hours ago, webfact said:

As recently as Friday, Trump said talks with China were going well.

This is standard Trump speak,  relevant to anything he is involved in (aka bafflegab, bullshit, talk for talking, talk and say nothing, motor mouth). The statement means nothing, it's his default lie line.

 

Much like his North Korean lie line. And we all know how that turned out.