On Thursday, Trump met several Cabinet members and trade advisers and was expected to impose tariffs on at least $35bn to $40bn of Chinese imports, according to an industry official and an administration official familiar with the plans.
The amount of goods could reach $55bn, said the industry official. The officials spoke on condition of anonymity in order to discuss the matter in the face of a formal announcement.
On the brink of a global trade war?
Trump has long vowed to fulfill his campaign pledge to clamp down on what he considers unfair Chinese trading practices.
If the president presses forward as expected, it could set the stage for a series of trade actions against China and lead to retaliation from Beijing.
Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world’s two biggest economies.
The US trade deficit with China was $336bn in 2017.
Administration officials have signaled support for imposing the tariffs in a dispute over allegations that Beijing steals, or pressures foreign companies to hand over technology, according to officials briefed on the plans.
The Chinese have also threatened to counterpunch if Trump goes ahead with the plan.
Chinese officials have said they would drop agreements reached last month to buy more US soybeans, natural gas and other products.
“We made clear that if the US rolls out trade sanctions, including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect,” foreign ministry spokesman Geng Shuang said Thursday.
Beijing has also drawn up a list of $50bn in US products that would face retaliatory tariffs, including beef and soybeans – a shot at Trump’s supporters in rural US.
Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump’s watch and undermine the benefits of the tax cuts he signed into law last year.
“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown,” Gary Cohn, Trump’s former top economic adviser, said at an event sponsored by The Washington Post.
Trump’s calls for billions in tariffs could also complicate his efforts to maintain China’s support in his negotiations with North Korea.
The decision on the Chinese tariffs comes in the aftermath of Trump’s summit with North Korean leader Kim Jong-un.
Trump has coordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal. But he signaled that whatever the implications, “I have to do what I have to do” to address the trade imbalance.
Al Jazeera’s Florence Looi, reporting from Beijing, said that the successful talks between Trump and Kim in Singapore, could give the US “a lot more leeway” to be tough on trade with China.
“Because ultimately, China will not want to derail the process, as denuclearisation in the Korean Peninsula is consistent with China’s security interests,” she said.
SOURCE: Al Jazeera and news agencies