Written by Alan Rappeport
President Donald Trump, frustrated by increasingly fruitless negotiations with China, said Thursday that the United States would impose a 10% tariff on an additional $300 billion worth of Chinese imports next month, a significant escalation in a trade war that has dragged on for more than a year.
The new tariff would come on top of the 25% levy that Trump has already imposed on $250 billion worth of Chinese imports, resulting in the United States taxing nearly everything China sends to the United States, from iPhones to New Balance sneakers to children’s books.
Trump had agreed in June not to impose more tariffs after meeting with Chinese President Xi Jinping and agreeing to restart trade talks. But Trump said he was moving ahead with the levies as of Sept. 1 as punishment for China’s failure to live up to its commitments, including buying more American agricultural products and stemming the flow of fentanyl into the United States.
“Until such time as there is a deal, we’ll be taxing them,” Trump told reporters on the White House lawn.
Trump’s move, which will most likely be met with reciprocal punishment by China, increases the likelihood that the world’s two largest economies will be locked in a protracted trade dispute for months, if not years. While the countries continue to negotiate, the path to a deal has only narrowed as Beijing and Washington harden their positions and as political dynamics, including the 2020 election, further complicate the chances for a compromise.
The United States has insisted that China buy more farm goods and agree to cement certain changes into Chinese law. Beijing has resisted codifying any changes into law and has said it will only enter into a deal that is mutually beneficial. Both sides seem increasingly confident they can wait out the trade war indefinitely.
As he departed the White House for a rally in Ohio, Trump accused Xi of trying to slow-walk negotiations ahead of the 2020 election in the hopes that a Democrat would win the White House.
He added that the tariffs could be raised if the talks continue to falter, but allowed that they could also be removed.
The stock market reacted negatively to Trump’s comments, tumbling sharply after the threat to impose the new tariffs appeared on Twitter. The S&P 500 closed down 0.9%.