WASHINGTON – President Donald Trump said Friday he’s prepared to impose tariffs on an additional $267 billion in Chinese imports. Such a step would significantly escalate his trade war with Beijing and would likely increase costs for a broad range of U.S. businesses and consumers.
Those potential tariffs would come on top of tariffs Trump has said he’s poised to slap on $200 billion worth of goods from China – everything from handbags to bicycle tires. It would also be in addition to tariffs his administration already has imposed on $50 billion in Chinese imports, for which Beijing has retaliated with an equal amount of import taxes on U.S. goods.
“I hate to say this, but behind that there is another $267 billion ready to go on short notice if I want,” Trump told reporters on Air Force One. “That totally changes the equation.”
The trade war the president has initiated between the world’s two largest economies stems from concerns that China has deployed predatory tactics – including cyber-theft – to try to supplant America’s technological supremacy.
Trump also wants to reduce the United States’ gaping trade imbalance with an ascendant Chinese economy. The president says he believes that narrowing the trade gap will bring jobs to the United States, even though it could spark higher inflation.
Trump’s threat to escalate U.S. tariffs on Chinese imports contributed to a decline on Wall Street, with stock index futures dropping on concern that companies and workers would likely endure some financial pain.
The president’s comments Friday came one day after a public comment period ended on his proposed taxes of up to 25 percent on $200 billion of Chinese imports. Trump said earlier Friday his administration could “very soon” impose those tariffs. China has warned that it would retaliate with import taxes on $60 billion worth of U.S. goods.
Mark Zandi, chief economist at Moody’s Analytics, estimates that tariffs on $200 billion of Chinese imports, on top of previously enacted duties, would shave a quarter of a percentage point off the economy’s growth over the next 12 months. It would also cost roughly 350,000 to 400,000 jobs.
While those numbers wouldn’t derail the economy – Zandi forecasts that growth would reach 3 percent this year – “you’d start to feel it,” Zandi said.
If the president followed through with all his proposed tariffs, essentially every good being imported from China would be taxed. The administration has asserted that Trump’s tariffs would force China to trade on more favorable terms with the United States. Economists caution, though, that the drag on growth would worsen the longer the tariffs were in place.
“To a certain extent, it’s going to be up to China,” the president said Friday.