President Trump Threatens to Increase Tariffs on $525 Billion of Chinese Goods
In a series of tweets posted on May 5, President Trump threatened to raise tariffs on $200 billion of Chinese goods from 10% to 25%, effective this Friday, May 10. He further threatened a 25% tariff on an additional $325 billion of Chinese goods that are currently untaxed, stating it could happen “shortly.” It is unclear whether U.S. officials will actually impose the substantial tariff change this coming Friday, or if it is simply a tactic to apply pressure in trade talks. Trump has previously proposed raising tariffs on Chinese goods to 25% but postponed implementation due to progress in trade talks between the two countries (https://www.businessinsider.com/trump-china-tariff-increase-delayed-past-march-1-deadline-2019-2).
Trump stated in his tweets, “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate.” According to a recent WSJ report (https://www.wsj.com/articles/u-s-china-conclude-productive-trade-talks-but-sticking-points-remain-11556718515), the two countries have made significant headway towards a trade deal, but several issues remain including the use of tariffs as an enforcement measure, China’s industrial policy of granting subsidies to certain companies, and intellectual property protection. Chinese negotiators were scheduled to travel to Washington D.C. on May 8 to continue negotiations, but as of Monday, commentators are unsure if Chinese negotiators will keep their plans. It remains to be seen how President Trump’s latest threats will affect the course of negotiations.