US President Donald Trump said on Monday that he had not decided whether to follow through with threats to impose tariffs on all imports coming from China, as his trade chiefs issued a full list of commodities that would be subject to the new duties.
“I haven’t made that decision yet,” Trump said. “We have the right to do another 325 billion at 25 per cent. That is a tremendous amount of money that would come into our country.”
Though Trump has repeatedly used the figure US$325 billion, the Office of the US Trade Representative (USTR) estimates that the value of all remaining imports from China is closer to US$300 billion.
Trump’s comments came as the USTR released details about the public comment period that will precede any further tariff action, during which companies are invited to testify and seek exclusions from the taxes.
The final deadline for testimonies and rebuttals will land in late June, around the same time that Trump is expected to meet his Chinese counterpart, President Xi Jinping, during the G20 summit in Japan – a face-to-face that Trump confirmed on Monday.
“That’ll be, I think, probably a very fruitful meeting,” he said, speaking to reporters at the White House after a meeting with Hungarian prime minister Viktor Orban.
The USTR’s notice on Monday did not indicate when the new tariffs – should the US decide to go ahead with them – would take effect.
The release of the list of goods to be taxed follows a string of recent escalations in the trade war.
As negotiators scrambled to keep talks alive in Washington last week amid US accusations that China had sought to renegotiate core commitments in the deal, the Trump administration increased tariffs on US$200 billion of Chinese goods from 10 to 25 per cent.
“We had a deal with China, it was 95 per cent there,” Trump said on Monday, repeating charges that China decided to, as he put it, “un-agree” to certain commitments. “I said, ‘Good, that’s fine, put on the tariffs.’”
In response, Beijing announced on Monday that it would raise existing tariffs on US$60 billion of US goods to various levels of taxation as high as 25 per cent.
In announcing the new duties on Monday, the Chinese Ministry of Commerce said the recent US had violated consensus achieved in the talks and harmed the interests of both sides.
Striking an even more combative tone, an opinion piece published on Monday in the party mouthpiece People’s Daily said the blame was entirely Washington’s for the failure to reach a deal last week.
But criticism of the latest move to impose tariffs on all imports from the US’ largest trading partner will not be limited to Beijing, with the American business community urgently concerned about the effect that rising duties will have on consumers.
“A massive increase in tariffs does not correct Chinese bad behaviour, it punishes American families,” said Hun Quach of the Retail Industry Leaders Association (RILA), a member organisation whose clients include Walmart, Target and Apple.
“Tariffs are taxes, and if this latest threat takes effect this will likely be the largest tax increase on consumers in American history,” Quach, a former USTR official and RILA’s vice-president of international trade, said in a statement.
Trump has consistently argued that tariffs, aside from being useful in bringing trading partners to the negotiating table, are an effective way of having those partners create revenue for the US Treasury.
Yet multiple recent studies have shown that it is largely US importers and, ultimately, consumers, who foot the bill for those tariffs, and that Chinese exporters of tariffed goods have generally not lowered prices in order to remain competitive in the US market.
In a surprising admission on Fox News Sunday, chief White House economic adviser Larry Kudlow acknowledged that contrary to Trump’s claims, China was not paying the bill.
When asked whether it was US businesses that were paying for the tariffs, Kudlow said, “Yes, I don’t disagree with that.”
“But the Chinese will suffer GDP losses and so forth with respect to a diminishing export market,” he said.
Companies seeking to have their goods exempted could find themselves with less agency in this round’s exclusion process, given that the Trump administration has framed the potential punitive action as an extension of US tariffs to all Chinese imports, whose annual value stands at around US$550 billion.
In its notice on Monday, the USTR said the new tariffs would be imposed on “essentially all” products not currently subject to US duties, but indicated that pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials and critical minerals would be included.
In a research note released on Saturday, Goldman Sachs said the cost of US tariffs so far had fallen “entirely on US businesses and households”.
It warned that a 25 per cent tax on all remaining goods from China would have a 0.5 percentage point effect on core inflation in the US, mainly because of the large share of consumer goods included in the proposed new tariffs.
“Further escalation of the trade war could result in a hit to GDP as large as 0.4 per cent,” said the note, which estimated the likelihood that the US would follow through with plans to tax the remaining US$300 billion of goods had risen to 30 per cent.
That assessment runs counter to claims by the White House, with Trump on Monday citing revenue from tariffs as the primary reason for strong GDP numbers in this year’s first quarter.
The USTR said on Monday that further escalation of the trade war was the result of “China’s failure to meaningfully address the acts, policies and practices” that had prompted its investigation into unfair Chinese trading practices.
Washington and Beijing “intend to continue further discussions”, it added.
Neither side has announced dates for the next round of talks.