Trump aims to squeeze China with higher tariffs

U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday.

U.S. Trade Representative Robert Lighthizer said Trump directed the increase from a previously proposed 10 percent duty because China has refused to meet U.S. demands and has imposed retaliatory tariffs on U.S. goods.

“The increase in the possible rate of the additional duty is intended to provide the administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens,” Lighthizer said in a statement.

There have been no formal talks between Washington and Beijing for weeks over Trump’s demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high technology industries.

Two trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing and that through informal conversations the two countries are discussing whether a “fruitful negotiation” is possible.”We don’t have anything to announce today about a specific event, or a specific round of discussions, but communication remains open and we are trying to figure out whether the conditions present themselves for a specific engagement between the two sides,” one off the officials said.

PUBLIC COMMENTS EXTENDED

The higher tariff rate, if implemented, would apply to a list of goods valued at $200 billion identified by the USTR last month as a response to China’s retaliatory tariffs on an initial round of U.S. tariffs on $34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

The USTR said it will extend a public comment period for the $200 billion list to Sept. 5 from Aug. 30 due to the possible tariff rate rise. The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.

China said on Wednesday that “blackmail” would not work and that it would hit back if the United States takes further steps hindering trade, including applying the higher tariff rate.

“U.S. pressure and blackmail won’t have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing.

Investors fear an escalating trade war between Washington and Beijing could hit global economic growth, and prominent U.S. business groups, while weary of what they see as China’s mercantilist trade practices, have condemned Trump’s aggressive tariffs.

In early July, the U.S. government imposed 25 percent tariffs on an initial $34 billion of Chinese imports. Beijing retaliated with matching tariffs on the same amount of U.S. exports to China.

Washington is preparing to also impose tariffs on an extra $16 billion of goods in coming weeks, and Trump has warned he may ultimately put them on over half a trillion dollars of goods, roughly the total amount of U.S. imports from China last year.

Reporting by David Lawder and Eric Beech in WASHINGTON, and Ben Blanchard in BEIJING; Writing by Mohammad Zargham and Michael Martina; Editing by Nick Macfie and Clive McKeef