Trump plans escalation for China’s tariffs

After a handful of quiet days in President Donald Trump’s trade war, it looks as if a further escalation may be on its way following reports that another round of tariffs on China could be announced imminently and a statement from the Chinese government saying it is readying a retaliation.

According to Bloomberg , the Trump administration is considering levying tariffs of 25% on $200 billion worth of Chinese goods shipped to the US, a move that would inevitably deepen tensions between the two nations. Trump so far has publicly threatened 10% tariffs on this tranche of imports.

Citing three sources familiar with the plans, Bloomberg said the US would raise its threat to 25% tariffs as a means of getting the Chinese government to enter into negotiations to de-escalate the conflict, which has seen tit-for-tat tariff impositions largely on industrial goods.

The increased tariff proposals could be announced in a Federal Register notice as early as Wednesday, one of Bloomberg’s sources said.

They include food products, chemicals, steel and aluminum and consumer goods ranging from dog food, furniture and carpets to car tires, bicycles, baseball gloves and beauty products.

There was no immediate reaction from the Chinese government.

In July it accused the United States of bullying and warned it would hit back.

Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent U.S. business groups have condemned Trump’s aggressive tariffs.

Stock markets edged up globally on Tuesday on a report that the United States and China were seeking to resume talks to defuse the budding trade war.

Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have been speaking privately as they seek to restart negotiations, Bloomberg reported, citing sources.

A spokeswoman for the U.S. Trade Representative’s Office declined to comment on the proposed tariff rate increase or on whether changing them would alter the deadlines laid out for comment period before implementation.

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 billion dollars of goods – roughly the total amount of U.S. imports from China last year.

The $200 billion list of goods targeted for tariffs — which also include Chinese tilapia fish, printed circuit boards and lighting products — would have a bigger impact on consumers than previous rounds of tariffs.

Trump had said he would implement the $200 billion round as punishment for China’s retaliation against the initial tariffs aimed at forcing change in China’s joint venture, technology transfer and other trade-related policies.

He also has threatened a further round of tariffs on $300 billion of Chinese goods. The combined total of over $500 billion of goods would cover virtually all Chinese imports into the United States.

The U.S. Trade Representative’s office initially had set a deadline for final public comments on the 10 percent proposed tariffs to be filed by Aug. 30, with public hearings scheduled for Aug. 20-23.

It typically has taken several weeks after the close of public comments for the tariffs to be activated.