Donald Trump has issued China with a renewed threat that he could impose $200bn of import tariffs on Chinese goods arriving in America as part of the escalating trade war between Washington and Beijing.
The US president used a post on Twitter to warn foreign countries they would face higher import tariffs should they fail to agree “fair” trade agreements with the US, in a move likely to be seen as a thinly-veiled threat to China.
He tweeted: “Tariffs have put the US in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country – and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be ‘Tariffed!’”
Reports over the weekend suggested White House officials have been put on notice to impose a fresh round of import tariffs on $200bn of Chinese goods. More than 1,000 products would be subject to the 10% border tax, which would be designed to make foreign imports more expensive than their domestic equivalents.
Trump is expected to announce the introduction of the tariffs from as early as this week amid a deterioration of relations between the US and China, sources told the Reuters news agency.
Economists argue border tariffs are typically counterproductive because the higher costs are passed onto consumers.
Trump, however, believes the measures are having a positive impact on the US economy, adding in a separate Twitter post: “Our Steel Industry is the talk of the World. It has been given new life, and is thriving. Billions of Dollars is being spent on new plants all around the country!”
Trump slapped a 25% tariff on foreign steel imports earlier this year, with exemptions for some nations.
The president has used the threat of higher border taxes to force nations to renegotiate their trading arrangements with the US, although economists fear the impact could lower both American and global economic growth, while also unsettling business investment.
The US and China have already imposed additional tariffs on $50bn worth of each other’s goods in the intensifying trade standoff, which has rumbled on for months as Trump pledges to help create more manufacturing jobs in America.
He has criticised China for “unfair” trading practices including the theft of American companies’ intellectual property.
Analysts say the president seems keen on the next round of tariffs and the Chinese are rumoured to be balking at the next round of talks. Brad Bechtel of the investment bank Jefferies said: “I still think he goes ‘all the way’ [with tariffs on China]. He has bipartisan support and the midterms are looming on the horizon, so he will keep pushing.”
City investors hope Trump’s warnings for China are largely rhetoric designed to appeal to a domestic audience before he faces the midterm election in November. Financial markets have, however, been rattled in recent weeks as the trade conflict intensifies.
Reuters reported that the US treasury department invited senior Chinese officials to more talks designed to break the deadlock last week, although scepticism remains on both sides over the prospects of a breakthrough. China has warned the escalation of the trade conflict is not in the interest of either country.