ReutersWASHINGTON (Reuters) — U.S. President Donald Trump vowed to impose a 10 percent tariff on $300 billion of Chinese imports from Sept. 1, sharply escalating a bruising trade war between the world’s largest economies and jolting financial markets.
The announcement on Thursday extends Trump’s trade tariffs to nearly all of the Chinese goods the United States imports and marks an abrupt end to a temporary truce in a trade row that has hurt world growth and disrupted global supply chains.
Trump also threatened to raise tariffs further if China’s President Xi Jinping fails to move more quickly to strike a trade deal.
“I think President Xi ... wants to make a deal, but frankly, he’s not going fast enough,” Trump said.
Trump made the announcement in a series of Twitter posts after his top trade negotiators briefed him on a lack of progress in U.S.-China talks in Shanghai this week.
Trump later said if trade negotiations fail to progress he could raise tariffs further — even beyond the 25 percent levy he has already imposed on $250 billion of imports from China.
Senior Chinese diplomat Wang Yi told reporters on the sidelines of an Association of Southeast Nations event in Thailand the additional tariffs were “not a correct way” to deal with the bilateral dispute.
“Additional tariffs is definitely not a constructive way to resolve economic and trade frictions,” he said.
Retail associations predicted a spike in consumer prices. Target Corp. tumbled 4.2 percent, Macy’s Inc. fell 6 percent and Nordstrom Inc. was down 6.2 percent. Asked about the impact on financial markets, Trump told reporters: “I’m not concerned about that at all.”
Moody’s said the new tariffs would weigh on the global economy at a time when growth is already slowing in the United States, China and the eurozone.
The tariffs may also force the Federal Reserve to again cut interest rates to protect the U.S. economy from trade-policy risks, experts said.
Raising tariffs would lower the prospects of a deal rather than expedite it, China’s Global Times newspaper said. Beijing would focus more on efforts to survive a prolonged trade war, Hu Xijin, editor-in-chief of the Communist Party-backed newspaper, said on Twitter.
“New tariffs will by no means bring closer a deal that the U.S. wants; it will only make it further away,” Hu said.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin briefed Trump on their first face-to-face meeting with Chinese officials since Trump met Xi at the G20 summit at the end of June and agreed to a ceasefire in the trade war.
“When my people came home, they said, ‘We’re talking. We have another meeting in early September.’ I said, ‘That’s fine, but until such time as there’s a deal, we’ll be taxing them,’” Trump told reporters.
A source familiar with the matter said Trump grew frustrated and composed the tweets shortly after Lighthizer and Mnuchin told him China made no significant movement on its position.
Previous negotiations collapsed in May, when U.S. officials accused China of backing away from earlier commitments.
American business groups in China expressed disquiet over the latest round of U.S. tariffs. The U.S.-China Business Council said on Friday it was concerned the action “will drive the Chinese from the negotiating table, reducing hope raised by a second round of talks that ended this week in Shanghai.”
“We are particularly concerned about increased regulatory scrutiny, delays in licenses and approvals, and discrimination against U.S. companies in government procurement tenders,” said the U.S.-China Business Council’s President Craig Allen in an email.
Ker Gibbs, the president of the American Chamber of Commerce in Shanghai, urged both sides to keep talking.
Gibbs said that as market access in China “remains unnecessarily restricted,” the United States should continue its dialogue with Beijing, and “also work with like-minded countries to persuade China that fair and reciprocal trade and investment benefits all.”Speech