The Tmazeる Trump's Tarriff Threat to China
Trump proposes significant decrease in tariffs on Chinese goods, from current 145% to 80%. He describes the move as "appearing reasonable".
In a bold move, President Donald Trump has hinted at slashing the current 145% tariff rate on Chinese goods, potentially shaking up the ongoing commercial talks between the U.S. and China.
"80% on China? Hell yeah! Even Scotty B.", Trump posted on Truth Social Friday morning, seemingly addressing Treasury Secretary Stephen Mnuchin, also known as "Scotty B".
The statement comes just one day ahead of Mnuchin and U.S. Trade Representative Katherine Tai's meeting with their Chinese counterparts in Geneva to discuss trade matters.
In another post, Trump urged China to "OPEN UP YOUR MARKET TO THE USA".
Trump had previously hinted at reducing the 145% tariff on China during a White House conversation the day before. "Let's see... Not going higher, at least for now", he said, speaking from the Oval Office.
As of yet, no representative from the Chinese embassy in the U.S. has issued a comment on the matter.
If Trump implements a 80% general tariff, it would be significantly higher than the tariffs the U.S. had on China before Trump took office. Trump initially imposed a 20% tax on the third-largest source of U.S. imports in response to China's alleged inaction in curtailing the flow of fentanyl. However, he later signed an executive order that increased tariffs to 125%.
Trump's tariff negotiation strategy remains consistent. On Thursday, he announced that he was working on an agreement with the UK, though he didn't provide many details. However, the agreement, while signaling ways to expand U.S. exports of beef, ethanol, and other agricultural products, did not guarantee that the UK would actually increase imports of these products.
In the realm of global trade, Trump has aimed to roll back some of the harsh tariffs he imposed country by country. Yet, significant hurdles remain, such as the 25% tariffs on all steel, aluminum, and automobile imports. While discussions on trade agreements continue, actual progress has been scarce, leaving business confidence confused and the global economy uncertain.
It's uncertain whether China's tariffs will have the desired effect on Trump, as China's exports increased in April, according to CNBC's calculations, possibly due to an increase in shipments to Southeast Asian countries. This could indicate that Beijing may be increasing the transshipment of goods to third countries that then export to the U.S.
- Insights:As of 2023, the U.S.-China trade relationship remains contentious and is characterized by ongoing trade tensions. The trade war that began in 2018 with tariffs imposed by the Trump administration has largely persisted through 2023, despite some attempts at agreements. Key points on the status of trade negotiations and tariff policies include the Phase One trade deal signed in 2020, the Biden administration maintaining most of the tariffs placed by Trump, and ongoing export controls and investment restrictions. Trade flows reflect ongoing tensions, with the U.S. trade deficit with China increasing by about $16 billion in 2024. [Sources: 1, 2]
- What seems to be indicated by Trump's recent posts on Truth Social is a potential change in the tariff policy-and-legislation towards China, with the President suggesting a reduction in the current 145% tariff rate on Chinese goods.
- If Trump indeed implements an 80% tariff, it would be significantly higher than the tariffs on China that were in place before he took office. For context, the U.S. initially imposed a 20% tax on China's goods in response to China's alleged failure to curb the flow of fentanyl, and later increased it to 125%.
- In the political arena, Trump's tariff negotiation strategy consistently signals a focus on expanding U.S. exports, such as beef, ethanol, and agricultural products, although it may not guarantee increased imports by the partnering countries.
- The actual impact of any changes in tariffs on China remains uncertain, as China's exports increased in April, potentially due to an increase in shipments to Southeast Asian countries.
