trade war

Trump Makes Wild, Improbable Tariff Threat to China Ahead of Trade Talks

Chinese Vice Premier Liu He, shown here observing one of Trump’s gestures at the White House early last month, will return to D.C. for talks beginning Wednesday. Photo: Jim Watson/AFP/Getty Images

President Trump threatened China with an almost hilariously dramatic trade war escalation on Sunday, days before a Chinese delegation of more than a hundred people arrive in Washington to iron out a final deal. Signaling his impatience with what he claimed was a slowdown caused China’s efforts to renegotiate the plan, Trump tweeted that he will more than double the current U.S. tariffs on some $200 billion of Chinese goods (from 10 to 25 percent), as well as add a new 25 percent tariff on another $325 billion worth of Chinese goods — and it will all happen on Friday, unless China does the deal. (The trade talks don’t even start until Wednesday.)

Regarding any efforts to renegotiate the deal, Trump insisted “No!”

He also falsely claimed that the higher tariffs his administration enacted — which are paid by the U.S. companies importing Chinese goods and then usually passed along as higher costs to U.S. customers — were paid by China directly to the U.S., incurred little cost to Americans, and were “partially responsible for our great economic results.”

Trade talks had been proceeding well enough that the Trump administration held off another, planned-in-advance tariff bump in March. Negotiations have reportedly become more contentious in the end stage, however, though U.S. officials said that last week’s talks in Beijing were productive.

Several issues remain sticking points heading into this week’s meeting, according to the Wall Street Journal, including the Trump administration’s contentious demand that the U.S. retains a unilateral ability to reimpose tariffs without retaliation if it doesn’t think China is holding to the deal. Another impasse is that China would like all of the Trump administration’s tariffs rolled back immediately, while the U.S. wants to gradually reduce them as they confirm China is keeping its word.

Less than five days is also an awfully small amount of time for the Trump administration to get everything in place for Trump’s impromptu tariff increase, notify U.S. industries, and make sure the process is protected against legal challenges.

Whatever hurdles remain, President Trump loves high-drama power plays and treasures his self-conjured reputation as a master dealmaker, so his last-minute threat to launch a trade-war nuke should have been expected. It still rattled economic markets and several U.S. industry groups on Sunday, however. There is also a risk that Trump’s posturing could prompt a nationalist backlash in China.

Trump’s threat could even work as intended, as any world leader who thinks Trump actually knows what he’s doing, listens to his advisers, or regularly understands the real world consequences of anything he does or says, has not been paying much attention. Tariffs and Trump’s willingness to wield them despite the damage they do to American businesses are indeed a powerful negotiating tool. Plus, as economist and trade law expert Chad Bown told the Journal, while the tariff spike is probably an empty threat, “with President Trump, you never know.”

“If they announce a deal later this week, it will make it appear as if he acted as tough as possible to get the deal,” Bown also wisely predicted.

And if Trump’s craziest-guy-in-the-room act is for real or seems real enough drive down the markets, the news coverage of bad economic numbers could make a quick and moderating impression on the president.

Trump Makes Wild Tariff Threat to China as Trade Talks Loom