Trump Threatens New Tariffs Against China As Deadline Looms

As the Friday deadline for trade talks with China approaches, President Trump is threatening even more tariffs.

Over the weekend, President Trump once again raised the specter of increasing tariffs on Chinese goods as negotiations between Washington and Beijing appear to have hit an impasse:

WASHINGTON — President Trump, emboldened by a strong American economy and wary of criticism that an evolving trade deal with China would not adequately benefit the United States, threatened on Sunday to impose more punishing tariffs on Chinese goods in an attempt to force additional concessions in a final agreement.

Mr. Trump, in a tweet, warned that he would increase tariffs on $200 billion in Chinese goods at the end of this week and “shortly” impose levies on hundreds of billions of dollars of additional imports. Dozens of high-level Chinese officials are arriving in Washington this week for what was expected to be a final round of negotiations toward a trade agreement, at least in principle.

Mr. Trump’s threat caught Chinese officials by surprise. On Monday morning in Beijing, they were trying to decide whether Vice Premier Liu He should go ahead with his visit later this week to Washington, said people familiar with the talks who insisted on anonymity because they were not authorized to comment publicly on the negotiations.

President Trump’s tweets come after Chinese officials took a tough line in high-level trade negotiations last week in Beijing, two of the people said. Chinese negotiators said they were reluctant to make any agreement that would require China’s legislature to approve changes to current law. The legislature in March already approved a new foreign investment law that added protections for foreign companies who fear they will be forced to transfer their technology and know-how to Chinese firms, but business groups and Trump administration officials said it didn’t go far enough.

Mr. Trump’s tweet fit a familiar pattern. He has routinely turned to tariffs to help speed negotiations and win concessions from America’s trading partners. The president has already hit Mexico, Canada, Europe and Japan with steel and aluminum tariffs and threatened to impose auto tariffs if they do not acquiesce to demands on trade and other matters. Mr. Trump has already imposed tariffs on $250 billion worth of Chinese goods and is now threatening to tax nearly all of the products China exports to America.

But it remains to be seen whether Mr. Trump’s threat will produce a beneficial trade agreement for the United States — or whether his attempts to pressure China will backfire by pushing already-tense relations past the breaking point. While the United States believes it has leverage over China, huge swaths of the American economy depend on access to the Chinese market for materials, products and sales.

Some of the recent strengthening of the American and Chinese economies — which has helped to quell fears of a possible recession — stems from expectations that the United States and China could soon end their monthslong trade war. Stock markets have recovered on expectations of an agreement and the Federal Reserve chairman, Jerome H. Powell, at a meeting last week, cited “reports of progress in the trade talks between the United States and China.”

The sudden hitch could change that. Asian markets opened broadly lower on Monday. Shares in China were down more than 5 percent in late morning trading.

Treasury Secretary Steven Mnuchin, who made a quick trip to Beijing last week, has expressed optimism about the trade talks, which he said are in “final laps.” And outside advisers to the White House have said a deal is more likely this week than not.

But in a tweet on Sunday, Mr. Trump said talks were progressing “too slowly” and suggested that the Chinese were trying to “renegotiate” the deal. Mr. Trump repeated a threat to raise the rate on existing tariffs to 25 percent and tax $325 billion worth of China’s exports to the United States that aren’t already subject to levies.

Mr. Trump had previously threatened more tariffs, but delayed that increase as he cited “substantial progress” in trade talks, which had moved far enough along that Mr. Trump predicted a signing ceremony with Xi Jinping, China’s president, at some point soon.

But while the two sides have talked for months, Chinese negotiators have continued to resist some of the more structural economic changes that the administration wants and insisted that Mr. Trump remove all of the tariffs he placed on $250 billion worth of Chinese goods.

The Wall Street Journal, meanwhile, reports that China has responded to this latest threat of additional tariffs by pulling out of the ongoing trade talks altogether.

Here are the Presidents tweets on the matter:

All of this, of course, is just the latest development in a trade war that began with the steel and aluminum tariffs that President Trump announced in March of last year, but its roots go back much further. From the moment he entered the race for President, Trump was attacking President Obama and his predecessors for what he claimed were a number of “bad trade deals” that were hurting American businesses while benefiting overseas competitors, and he singled out China as the focus of his attacks on this issue. This mirrors almost exactly the rhetoric that Trump used in the 1980s and 1990s when he was first becoming a “celebrity.” The only difference between then and now is that his target back then was Japan rather than China. Given that this was a time when Japan was proving to be a strong competitor and, much to the chagrin of people like Trump, Japanese investors were buying up real estate in Manhattan and other locations that he was seeking to do business. While the target was different there was really no difference between what Trump was saying back then and what he’s saying now, and in both cases, it is utterly economically illiterate.

In any case, it didn’t take long for the Chinese to retaliate against Trump’s steel and aluminum tariffs, and it didn’t take long after that for the U.S. economy to start feeling the impact of the tariffs and the President’s widening trade war. For example, just two months after the steel and aluminum tariffs were announced, The Wall Street Journal reported that prices for both foreign and domestic steel and aluminum were increasing and this was having a negative impact on manufacturers that rely on these raw materials for their products. Other reports have indicated that American pork farmers were increasingly nervous about their overseas business with nations like China due to the fact that Beijing was threatening to hit American agriculture with retaliatory tariffs. In Iowa, it was reported that Chinese retaliation for the tariffs could cost soybean farmers $624 million this year alone, with the prospect of larger losses if the retaliation continues beyond this year. This has led many leaders in Iowa and elsewhere, including Senator Chuck Grassley to express concern about the impact of the trade war on Republican fortunes in the fall. This is especially true given the fact that the tariffs seem to be expressly targeted toward Trump voters and middle-class Americans. In the time since then, we have also seen that the tariffs have had a negative impact on other American businesses, and has even led an iconic American brand like Harley-Davidson to announce that they are moving some production overseas in response to the retaliatory tariffs imposed by the European Union. In August, Trump announced a new round of tariffs on Chinese goods and the Chinese responded immediately with another round of retaliatory tariffs. Finally, and most recently, the Administration announced yet another expansion of the trade war, and of course, the Chinese responded accordingly.

Since then, both the United States and China have sought to find a way to resolve the issues that led to the trade war given the fact that, in the end, it will only serve to have a negative impact on the economies of both nations. As a result, some of the tariffs announced by both sides have been put on hold as American and Chinese negotiators shuttle back and forth between Washington and Beijing seeking to resolve their disputes. While there have been some signals in the past that a deal, which apparently would be capped off by a visit to the United States from Chinese President Xi Jinping to sign a final agreement, was closer than some of the external signs might indicate, so far that agreement has proven to be elusive. Currently, there is a self-imposed deadline of Friday to reach an agreement after which the tariffs that have been held in abeyance would be put into effect and, if the President’s tweets are to be believed, additional tariffs will be imposed.

Not surprisingly, these Sunday tweets from the President did not go over well with investors in the world’s stock markets. Markets in Asia and Europe were markedly down overnight, and the U.S. stock markets opened sharply lower, although at this hour they have recovered some of their early losses. In any case, it’s possible that what we’re witnessing here is simply a negotiating tactic and that we will ultimately see a deal before Friday. It’s also possible, though, that there will be no deal and that we’ll end up heading back into trade war that nobody can win.

FILED UNDER: China, Donald Trump, Economics and Business, International Trade, National Security, Politicians, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook


  1. grumpy realist says:

    If China wants to really bring the hammer down, it just has to say “no thanks, we’re not participating” the next time we put U.S. government bonds out on the market to cover our deficit.

  2. gVOR08 says:

    From the quoted article,

    Stock markets have recovered on expectations of an agreement

    As you note, they were off this morning. Dow off about 450, not quite half recovered when I looked a minute ago. Enough of this, Republicans might consider impeachment.

    Comments in WAPO earlier were running heavily to speculation somebody was shorting. No one seemed to think Trump himself. Less, I think, based on integrity than on smarts.

  3. drj says:

    From the NYT piece:

    Mr. Trump’s tweet fit a familiar pattern. He has routinely turned to tariffs to help speed negotiations and win concessions from America’s trading partners. The president has already hit Mexico, Canada, Europe and Japan with steel and aluminum tariffs…

    Not so with either the EU or even Japan.

    For an economy the size of the US, it is relatively easy to bully neighbors with much, much smaller economies such as Mexico and Canada. They a) can’t effectively retaliate; and b) with whom else are they going to trade?

    But even with Mexico and Canada, the concessions the US managed to gain weren’t particularly impressive.

    However, to take on economies such as China and the EU that come close in nominal GDP (and are both quite a bit larger when the GDP calculation is based on purchasing power parity), is something completely different.

    The US will not win these negotiations.

  4. Teve says:

    @grumpy realist: China would only change the interest rates a marginal amount. They own about $1.2 trillion of our >$22 trillion debt.

  5. michael reynolds says:

    If I’m Xi I’d welcome this.

    What are my long-term goals? To replace the US as the world’s dominant superpower. To extend Chinese influence – economic to start, military later – in Asia and in Africa. How is that goal advanced by caving to Trump? How is that goal advanced by resisting Trump?

    A stand-down by Xi would be a terrible loss of face. And in two years it’s likely Trump will be gone and things will calm down. So why would I suffer a loss of face that would set back my long-term goals, when I can spend the next two years demonizing the US, blaming all domestic economic woes on Trump, whipping up Chinese nationalism, and justifying military expansion to counter the Trumpian threat?

    Don’t throw me in that briar patch, Br’er Fox.

  6. Slugger says:

    Are any American business enterprises pushing for tariffs? When Chinese manufacturers ship something to the US at a low price, this should be good for us consumers unless it causes such damage to our industrial base that it winds up hurting our country as a whole. After all, a low price for steel or aluminum should be like a low price for petroleum; good for most consumers. If the low Chinese prices are damaging our country, I would think that industry segments in the direct line of fire would be the first to complain. I don’t recall any CEO asking for tariff protection for his industry.
    I do have concerns about safety and purity of Chinese goods. There have been troublesome issues with some of their products, and I have read reports about working conditions in China that seem wrong. Are the tariffs addressing these issues?

  7. Kathy says:


    I don’t recall any CEO asking for tariff protection for his industry.

    Boeing specifically asked for a tariff against Canada’s Bombardier on sales of their CS-300 to Delta. Curiously enough, Boeing has no plane that directly competes with that model. The tariff was thrown out in court, and the whole point rendered moot when Airbus acquired the C Series program, rebranding it as the A220.

    China is a BIG aviation market these days. So Boeing wouldn’t want to alienate it. It already competes with Airbus, and soon a Chinese company, COMAC, is expected to launch a narrow-body airplane that would compete with Boeing’s 737 and Airbus’ A320.

  8. MarkedMan says:

    @michael reynolds:

    A stand-down by Xi would be a terrible loss of face

    This may be true, depending on how the Chinese regime have been portraying these talks in the domestic media, but I wouldn’t assume so. When I lived in China I was truly astonished at what various parts of the government were willing to do to preserve “social harmony”. For example at one point I was getting truly concerned about flying domestically because some regional administrator panicked when irate passengers, stuck for hours while no plane took off, started a mini-riot at the administrator’s airport. Far from cracking heads, the administrator agreed to give each of them the equivalent of almost $100US. As you can imagine, word spread and the semi-riot tactic was quickly emulated in dozens of airports. Another example: for almost my entire four years commuting to work, I passed three nail houses (钉子户) that were blocking a development worth tens of millions of dollars US. China, being communist, has no private property so technically the homeowners didn’t have a leg to stand on. But despite the fact that the developer was actually the local municipal government, there was still a lone holdout when I left after four years. I’m sure the developer was relentless in pressuring the homeowner to leave, but they never used force since that would be a breach of harmony. (Chinese citizens shouldn’t try this in other provinces or in less visible areas. As a foreigner, don’t try this at all.)

    My point is that, unless the government has made this a point of pride, they can go a long way towards accommodating the Americans and still receive accolades from the business community for “maintaining a steady hand”.

  9. Guarneri says:

    That’s a nice recitation of those harmed by tariffs. Notably absent is a list of those helped, and the observation that they had been harmed for years.

    The stock markets reaction is rather muted, don’t you think?

    A 1% GDP effect on the US has about a 5x effect on China. And now China requires net financing. Kinda like Trumps negotiating position.

  10. Just nutha says:

    “Notably absent is a list of those helped, and the observation that they had been harmed for years.” What an amazing opportunity to set the record straight.

    Buehler… Buehler?

  11. Slugger says:

    @Guarneri: Please explain this to me. As Kathy above points out with the Boeing/Bombardier example, I don’t think American business people are reluctant to ask for help from the government. Who is asking for tariffs against China? Not Harley-Davidson, for one. How do low prices for steel and aluminum hurt Americans in general? I don’t see much benefit from hurting China just to be hurting them.

  12. Liberal Capitalist says:

    It’s all bluster.

    If a 25% tarrif were put in place, the ones that would end up paying are the consumers.

    WalMart, Home Depot, Lowes and all the other various locations that stock Chinese goods would have to raise prices to pass on costs.

    So, the average joe trumpist loyal 32% would se their buying power drop like crazy.

    It was bad enough to wipe out the soybean farmers, but no way that 25% bluff will happen. Wall Street knows this… that is why the US reaction is minimal today.

  13. steve says:

    “So, the average joe trumpist loyal 32% would se their buying power drop like crazy.”

    Surely you dont think Trump or anyone on the GOP really cares about this? We need to do this to make the investor class wealthier and then they will use that money to provide better jobs for the Trump loyalists………eventually. They always buy that line, and they will do it again.


  14. Guarneri says:


    I understand your point, and unlike some of the lunatics here, you phrase the question properly. Specifically, “Americans in general.” However you stopped short (by citing a small number of companies) of acknowledging that some are harmed, or even that the transition requires redress.
    Its not sufficient to observe that Americans can get cheaper clothes or TV’s etc through the mercantilist policies of China, and beggar your neighbor.

    I’m a free trader, but have the ability to look at policy and avoid the hate Trump at all costs idiocy, and observe that we have no free trade. We have foreign countries taking advantage of us. In short, managed trade. This will inevitably help foreign countries, and those politically well enough connected in Washington to protect themselves. People’s objections to a policy of pushing back are immoral.

    The last three presidents (at least) have engaged in horrible trade policy. Mostly for political gain. Yes, correcting this will be messy. That’s what happens when you have to correct decades of asinine government policy. But it must be done. Its immoral to screw your neighbor just so your shirts will be cheaper. Its economically unsound to destroy your manufacturing base.

  15. Guarneri says:


    Nonsense here. Nonsense at Schulers place.

    At least you are consistent.

  16. michael reynolds says:

    Lies here, lies at Schuler’s place, at least you’re consistent.

  17. Slugger says:

    G, I understand that government actions that help the farmer who grows wheat may hurt the baker who bakes the bread, and really hurts the guy who just eats bread. Our gasohol policy is a fine example. I am very dubious about the utility of economic weapons against Communist dictators. Two generations of sanctions did not loosen the Castro grip; Kim is not missing any meals. Hurting the economy means many ordinary people go hungry, and any objectors go to re-education camps with no impact on the rulers.

  18. Just nutha ignint cracker says:

    @Guarneri: Buehler… ?

  19. Guarneri says:

    @michael reynolds:

    Hows your buddy Avenatti doing? Hows that Mueller investigation going?

  20. Guarneri says:


    Uh, what? Look, ignorant cracker (has there ever been better, more honest self assessment?) wants to claim there has been no harm to the manufacturing sector. That can only be described as delusional.

    I don’t believe in picking winners and losers in free markets. But we don’t have that. Trump simply recognizes that the trade situation is way too far out of balance. The lefties here apparently don’t give a damn. And hence, they got Trump. And ever since they have scrambled madly for ever more bizarre theories as to why.

    I laugh.

  21. The abyss that is the soul of cracker says:

    @Guarneri: Started charging Reynolds rent for the space he occupies in your head yet?

    You shouldn’t put words in peoples mouths either. Cracker was hoping for data to prove your assertion, and made no comment about harm or lack thereof to any economic sector at all. I expect that he is still hoping that you’ll move onto data from platitudes. I wouldn’t count on it myself, but I’m only an abyss.

    It’s your move… Buehler… ?

  22. Eric Florack says:

    It couldn’t be the Trump knows what he’s doing, could it?
    I mean, one even the supposed paper of record starts to notice….

    Certainly, it is true that China’s troubles come from two sources. The first of course being their dedication to socialism.. a point the New York Times will never admit to… and within that context a historic level of ineptitude on the part of Xi, a point the article goes into intense detail on.

    The difference now is that we have a president who is smart enough to recognize both those situations and take advantage of them. The result of that is that China wasn’t ready for a trade war, and will lose.

    It’s a quality that the Obama Administration never did possess… First because like Xi, they’re not very smart and as an extension of that, they think socialism is a worthy system of government.

    So it is, China got caught flat-footed by Trump. The long-term trade ramifications of this are going to be more positive than the left in this country and the Times among them, will ever admit to until decades after it’s happened… which in turn is precisely why the article I’m linking to here never bothers to mention Donald Trump in any significant way… And when they do it’s certainly not complimentary.

    You would be hard-pressed to find a better example of anti Trump bias in the mainstream media then this.