Trump threatens to hit China with $100 bln in additional tariffs

Stakes continue to rise in the ongoing trade dispute between the world’s two largest economies with Donald Trump instructing the US Trade Representative to consider slapping an additional $100 billion in tariffs on China.

Trump’s threat comes in response to Beijing announcing that it would hit the US with $50 billion in import levies if Washington went ahead with its plan to do the same.

According to Trump, the initial proposed US tariffs were a way for Washington to punish China for its longtime “illicit trade practices” that have “destroyed thousands of American factories and millions of American jobs.”

“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” Trump writes. “In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs.”

Of course, even Trump must have known that China would not respond to the tariffs by "repenting" and changing its ways on global trade.

Just prior to China proposing its own tariffs on Wednesday, the Chinese Embassy in Washington issued an unusually shade-filled statement, “strongly condemning” US measures, but warning that China would respond in kind.

“As the Chinese saying goes, it is only polite to reciprocate,” the embassy said.

Experts have said that while the $50 billion in tariffs proposed by the US on China are a bit of hodgepodge of different goods, the 25% import duties that have been proposed by China on the US are much more high-stakes, targeting critical imports like airplanes, automobiles, and soybeans, and were likely put forward as a warning for Trump not to escalate this matter further.

Politicians from both sides of the aisle in the US are becoming increasingly concerned that Trump’s actions could well start a full-blown trade war. Shortly after Trump’s latest statement was released, Republican Senator Ben Sasse from Nebraska tweeted that he hoped the president was only “blowing off steam,” adding that “setting American agriculture on fire is not a plan.”

For his part, Trump says that the US is not in a trade war with China because that war has already been lost years ago “by the foolish, or incompetent, people, who represented the U.S.”

“Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!” Trump tweeted yesterday.

In fact, the US trade deficit with China was $375 billion last year. If you include services, that number goes down to $337 billion. It’s not clear where Trump got his oft-repeated $500 billion figure from. He likely just made it up.

At the start of this week, China also slapped import taxes on some 128 different US products, including wine, pork, fruits, and nuts, worth about $3 billion a year in total.

That move came in response to the Trump administration decision last month to imposes taxes of 10% on aluminium and 25% on steel coming in from overseas.

Earlier that month, Trump tweeted that trade wars are “good, and easy to win.”

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