Trump has long vowed to fulfil his campaign pledge to clamp down on what he considers unfair Chinese trading practices. But his calls for billions in tariffs could complicate his efforts to maintain China’s support in his negotiations with North Korea.
Trump met several Cabinet members and trade advisers yesterday and was expected to impose tariffs of at least 35 billion to 40 billion on Chinese imports, according to an industry official and an administration official familiar with the plans. The tariffs could reach 55 billion, said the industry official.
If the president presses forward as expected, it could set the stage for a series of trade actions against China and lead to retaliation from Beijing. Trump has already slapped tariffs on steel and aluminium imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world’s two biggest economies.
The decision on the Chinese tariffs comes in the aftermath of Trump’s summit with North Korean leader Kim Jong Un. The president has coordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal.
Trump, in his press conference in Singapore on Tuesday, said the U.S. has a “tremendous deficit in trade with China and we have to do something about it. We can’t continue to let that happen.” The U.S. trade deficit with China was $336 billion in 2017.
Administration officials have signalled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans. China has targeted $50 billion in U.S. products for potential retaliation.
Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump’s watch and undermine the benefits of the tax cuts he signed into law last year.
The Chinese have threatened to counterpunch if the president goes ahead with the plan. Chinese officials have said they would drop agreements reached last month to buy more US soybeans, natural gas and other products.