Trump vows new tariff rise on Chinese goods

US president increases pressure on China to reach a trade deal before this week's trade talks in Washington.

    The move marked a major escalation in trade tensions between the world's two largest economies [Jonathan Ernst/Reuters]
    The move marked a major escalation in trade tensions between the world's two largest economies [Jonathan Ernst/Reuters]

    President Donald Trump has dramatically increased pressure on China to reach a trade deal by announcing he would increase US tariffs on $200bn worth of Chinese goods this week and target hundreds of billions more soon.

    The move, announced on Sunday, marked a major escalation in trade tensions between the world's two largest economies and a shift in tone from Trump, who cited progress in talks as recently as Friday.

    The Wall Street Journal reported that China was considering cancelling this week's trade talks in Washington in light of Trump's comments that took Chinese officials by surprise.

    A roughly 100-member Chinese delegation had been expected to accompany Vice Premier Liu He for the talks, according to a Trump administration official.

    US Treasury Secretary Steven Mnuchin described last week's round in Beijing as "productive".

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    But a less than rosy update from US Trade Representative Robert Lighthizer, including details that China was pulling back from some commitments it had made previously, prompted Trump's decision and jab on Twitter at Beijing, officials said.

    "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump said in a tweet.

    Trump said tariffs on $200bn of goods would increase to 25 percent on Friday from 10 percent, reversing a decision he had made in February after progress between the two sides.

    The president also said he would target a further $325bn of Chinese goods with 25 percent tariffs "shortly", essentially targeting all products imported to the US from China.

    Trump wants to keep some, if not all, of the existing tariffs on China as part of any final trade deal to ensure Beijing lives up to its commitments, a White House official said on Sunday.

    Mindful of his 2020 re-election bid, Trump suggested the measures were not leading to price increases for US consumers.

    "The Tariffs paid to the USA have had little impact on product cost, mostly borne by China," he tweeted.

    Tariffs on Chinese goods are actually paid to the US by the companies importing the goods. Most of those companies are US-based. American businesses, while largely supportive of Trump's crackdown on China's trade practices, are eager for the tariffs to be lifted, not increased and expanded.

    "Raising tariffs means raising taxes on millions of American families and inviting further retaliation on American farmers," said Christin Fernandez, a spokesperson for the Retail Industry Leaders Association. 

    SOURCE: News agencies