President Trump raised the pressure on China to strike a trade deal in Washington this week, vowing to increase U.S. tariffs on $200 billion of Chinese imports by Friday because negotiations have moved “too slowly.”
Indicating he is losing patience with talks that both sides have described as heading toward a deal, the president tweeted Sunday that he plans to raise tariffs from 10% to 25% by the end of the week.
He also warned that $325 billion worth of Chinese goods that haven’t been subject to tariffs will be levied at a rate of 25% “shortly.”
His announcement comes as a team of trade negotiators from China led by Vice Premier Liu He is due to arrive in Washington this week to resume the latest round of talks with Treasury Secretary Steven T. Mnuchin, U.S. Trade Representative Robert E. Lighthizer and other U.S. officials.
Both sides reported progress during negotiations in Beijing last week, and CNBC had reported that a deal could come by this Friday.
On Friday, Mr. Trump told reporters that the talks with China were going “very well.”
“We’re getting close to a very historic, monumental deal,” the president said.
Mr. Trump and Chinese President Xi Jinping announced an agreement Dec. 1 to suspend any more tariff increases on both sides as talks continued. After setting a deadline of March 1, Mr. Trump agreed to allow more time while negotiators tried to resolve thorny questions such as enforcement mechanisms and China’s forced transfer of technology from U.S. companies.
But his declaration on Sunday raised the stakes in the trade war that has rattled stock markets. The U.S. had begun raising tariffs on Chinese products in 2018 as Mr. Trump complained about Beijing’s unfair trade practices and a rising trade deficit with China.
The Chinese had responded with retaliatory tariffs on a broad range of U.S. goods, including agricultural products.
The Dow Jones Industrial Average futures lost about 400 points Sunday night after Mr. Trump’s announcement, indicating a sharp sell-off Monday to start the trading week.
Mr. Trump said Sunday that tariffs of 25% on $50 billion worth of Chinese high-tech products “are partially responsible for our great economic results.”
“The Tariffs paid to the USA have had little impact on product cost, mostly borne by China,” he tweeted. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
Economists say that tariffs are paid by U.S. importers, not by China, and that the importers pass along most of those increased costs to U.S. consumers.
In February, Mr. Lighthizer told Congress that the U.S. had suspended its plans to raise tariffs to 25% as negotiations progressed.
A national coalition called Tariffs Hurt the Heartland said if Mr. Trump follows through on his threat, it could cost the U.S. up to 1 million jobs.
“For 10 months, Americans have been paying the full cost of the trade war, not China,” the group said. “Doubling down on taxing Americans … should have nothing to do with reaching this agreement.”