From President Donald Trump’s first threats to impose tariffs on China during the 2016 election campaign, experts warned that a trade war could have negative economic impacts with the U.S.
Trump moved forward with the tariffs, causing well-publicized rifts within his administration, and China responded with its own levies on American exports. But the economy is thriving and Trump now says he believes that success is because of – not despite – the tariffs. And more tariffs are on the way this week, he vowed.
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results,” Trump tweeted. “The 10% will go up to 25% on Friday.”
Trump has made threats to raise the tariffs to 25% before and then pushed back deadlines – in January and March – in an effort to give the U.S. more leverage in trade negotiations with China.
A Chinese delegation is scheduled to resume talks in Washington on Wednesday aimed at resolving a trade war.
Trump said Sunday the negotiations with China were going “too slowly.” He said China was trying to “renegotiate,” to which he tweeted an emphatic “No!”
The president also proposed implementing a 25% tax on another $325 billion in goods from China that currently “remain untaxed.” He did not specify what goods would be hit or when that tax would be imposed, aside from “shortly.”
If the proposals were implemented as outlined in the president’s tweets, a total of $575 billion in Chinese imports would be hit with a 25% tax.
The president said the tariffs have had “little impact on product cost” outside of what is “borne by China.” But a study published last month by the University of Chicago’s Becker Friedman Institute of Economics found that because of the tariffs, consumers were paying 12% more for washing machines, or $1.5 billion a year.
“Despite the increase in domestic production and employment, the costs of these 2018 tariffs are substantial,” the paper concluded. It estimated that the domestic jobs that were protected by the tariffs did so at a cost of about $820,000 for each job.
Last week, Treasury Secretary Steven Mnuchin said he and other negotiators would decide soon if a trade deal with China is possible or if it is time for the U.S. to “move on.”
Mnuchin told Fox News Business that the two sides have ‘made a lot of progress,’ but ‘we still have more work to do.’
One of the main sources of tension centers on China’s push to establish itself as a technological superpower. American officials charge that China is resorting to predatory tactics – including cybertheft and forcing foreign companies to hand over technology – in order to help establish Chinese companies as world leaders in advanced industries such as robotics and electric vehicles.
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Contributing: The Associated Press