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Trump has decided to impose tariffs on $200 billion in Chinese goods

Trump has decided to impose tariffs on $200 billion in Chinese goods
President Trump's new tariffs on Chinese goods could drive up the cost of a range of products for U.S. consumers ahead of the holiday shopping season. (Susan Walsh / Associated Press)

President Trump has decided to impose tariffs on $200 billion in Chinese goods, two people briefed on the decision said, one of the most severe economic restrictions ever imposed by a U.S. president.

An announcement is expected to come within days, the people said, speaking on condition of anonymity because they weren't authorized to discuss internal plans.

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The new tariffs would apply to more than 1,000 products, including smartphones, televisions, toys and a range of other products. These penalties could drive up the cost of a range of products ahead of the holiday shopping season, though it's unclear how much.

Trump has ordered aides to set the tariffs on these products at 10% across a range of consumer products, probably leading to higher prices for American consumers. These tariffs are paid by U.S. companies that import the products, though they often pass the costs along to American consumers in the form of higher prices.

The United States imports roughly $500 billion in Chinese goods each year, and — combined with existing tariffs — these new penalties would cover half of all goods sent to the U.S. from China each year.

The 10% tariff is scaled back from Trump's initial plan, which was to impose 25% penalties on all of these imports. But the impact will still probably be felt by millions of American consumers, as it would apply to smartphones, computers, toys, televisions, and many other middle-class staples.

A White House spokesman didn't immediately respond to a request for comment on Saturday afternoon.

On Friday, White House spokeswoman Lindsay Walters said “the president has been clear that he and his administration will continue to take action to address China's unfair trade practices. We encourage China to address the long-standing concerns raised by the United States.”

Trump's top advisors have been united in his effort to push China to change it economic practices, but they have been split on his tactics. Some have advocated a more cautious, diplomatic approach. But Trump has signaled that he believes only the threat of real economic pain will coerce Beijing into major changes. He has recently boasted that he believes China's economy is suffering because of his hard-charging style.

Trump has accused China of a number of unfair trade practices, and he has threatened to impose tariffs on all Chinese imports if changes aren't made. He wants China to buy more American products, make more U.S. investment and stop stealing U.S. intellectual property, among other things.

The tariffs come as a number of top White House advisors have been trying to deescalate tensions between Trump and Chinese leader Xi Jinping. Treasury Secretary Steven T. Mnuchin was planning to restart talks with Chinese leaders soon, but they have vowed to retaliate to any escalation of the trade battle between the two countries with punitive steps of their own, and Trump's move could further push Beijing to retaliate.

Trump’s decision was first reported by the Wall Street Journal.

Trump has tried to use tariffs as a way to penalize a number of countries this year, including Mexico, Japan, Canada and members of the European Union, hoping that the threat of driving up costs on their products will make them more open to his demands. This tactic has had mixed success.

Trump first imposed tariffs on roughly $50 billion in Chinese products, and the list of products mostly included industrial equipment that would not directly impact consumers.

China responded by imposing tariffs on U.S. products like beef and soybeans, a response that spooked the U.S. agriculture industry and angered Trump and other White House officials. Trump responded this summer by ordering his advisors to come up with a list of $200 billion in other Chinese goods to penalize, a package of items that includes many consumer products.

And two weeks ago he said he was preparing a third package of penalties on what he said would be $267 billion in additional items, a list that probably encompasses all remaining goods produced in China.

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“For the near term, this combination of tactics seems to signal that unless and until China comes to the table with significant actions on the issues the U.S. is hammering, the U.S. will keep tariff pressure going,” said Claire Reade, a former U.S. trade negotiator. “Talks without action won't do the trick. The open question, of course, is how much action is enough and can China find a way to move that will be seen as being in its own interest, not kowtowing to the U.S.”

The U.S. ran a $233.5-billion deficit in goods trade with China during the first seven months of the year, an 8% increase compared with the same period in 2017.

Corporate executives increasingly believe the trade dispute can only be resolved by direct talks between Trump and Xi. The two leaders may see each other at the United Nations General Assembly in New York this month and are scheduled to meet on the sidelines of the Group of 20 summit in Buenos Aires in November.

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