President Donald Trump said on Aug. 1 that he would impose new tariffs of 10 percent on $300 billion worth of Chinese imports, to take effect on Sept. 1.
The surprise announcement came a day after face-to-face talks between U.S. and China negotiators concluded in Shanghai.
Later on Aug. 1, Trump said the tariffs must be imposed because China devalues its currency, referring to Beijing’s practice of artificially lowering the value of its currency to offset the effects of import tariffs.
“Until such time as there is a deal, we'll be taxing them,” Trump told reporters on the White House lawn before departing for a rally in Cincinnati, Ohio.
“China, for the last 20 years, has been taking hundreds of billions of dollars out of our country.”
He added that the current U.S. tariffs on Chinese goods have caused many companies to move production out of China in order to avoid paying the levies.
U.S. and Chinese trade representatives had just wrapped up two days of talks, described by both sides as “constructive.” They were the first in-person meetings since talks broke down in early May. At the time, the United States accused the Chinese regime of backtracking on agreed-upon provisions negotiated in previous months.
During the G-20 summit in Japan in late June, Trump and Chinese leader Xi Jinping agreed to restart talks, with Trump agreeing to hold off on threatened tariffs of 25 percent on the remaining $300 billion value of annual Chinese imports.
The president, in a series of tweets, said the Chinese regime has failed to deliver on a pledge to buy more U.S. agricultural products as part of his agreement with Xi to restart talks.
“China agreed to buy agricultural product from the U.S. in large quantities, but did not do so,” Trump wrote.
Trump also said that China has not followed through on its commitment to stem the flow of synthetic opioid fentanyl into the United States. Xi agreed to this measure during a previous meeting with Trump at the sidelines of the G-20 in Argentina in December 2018.
“Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!”
The Chinese regime had pledged that from May 1 it would expand the list of narcotics subject to state control to include 1,400 known fentanyl analogues, which have slightly different chemical makeup but are addictive and potentially deadly.
China manufactures most of the fentanyl and fentanyl analogues found in the United States. The synthetic drugs have contributed to the current opioid crisis; the United States recorded more than 28,000 synthetic opioid-related overdose deaths in 2017, according to the U.S. Centers for Disease Control and Prevention, the majority of them fentanyl-related.
U.S. stock prices immediately fell after Trump’s announcement, with the Dow Jones Industrial Average falling into negative territory.
Another round of talks between the world’s two largest economies has been scheduled for September.
Washington and Beijing have been locked in a trade dispute for more than a year, after the Trump administration slapped punitive tariffs on the Chinese regime for failing to address longstanding unfair trade practices including theft of U.S. intellectual property, forced technology transfer, and currency manipulation. Such issues are a sticking point for the United States during trade negotiations.
“Trump is taking a harder line,” he said. “He is very frustrated with the Chinese government.”
The move, Moore said, was to put pressure on Beijing so that it wouldn’t stall until after the 2020 U.S. presidential election to reach a trade deal.
“He’s tightening the screws now, so they don’t just play a waiting game,” Moore said.
“I think if China had their wish, they’d wait until after the election, they’ll pray that Trump loses, and then they’ll make a deal with a stiff—somebody that doesn’t know what they’re doing,” Trump told reporters on the White House lawn on July 30.
The president also warned in a series of tweets on July 30 that should he win re-election, the result could be no trade agreement, or a deal that is worse for Beijing than the one currently on the table.
The U.S. Department of Agriculture on Aug. 1 confirmed private sales to China of 68,000 tons of soybeans in the week that ended on July 25.
The sale was the first to a private buyer since Beijing offered to exempt five Chinese soybean importers from the 25 percent retaliatory tariffs China imposed on U.S. goods roughly a year ago.
Robert Spalding, former senior official at the National Security Council and senior fellow at the Washington-based think tank Hudson Institute, suggested Trump’s move was prompted by the outcome of the recent talks in Shanghai.
“My guess is they [U.S. negotiators] realized that the Chinese just don’t want a deal,” he said.
Spalding added that he believed Beijing was unlikely to reform its unfair trade practices and transform into a genuine market-based economy in the near future. Therefore, the United States should work to rebuild its manufacturing sector, he said, which saw massive job losses after China joined the WTO in 2001.
The United States should particularly focus on developing industries critical to its national security such as micro-electronics and telecommunications hardware, Spalding said.
“For far too long, China has taken advantage of our open system and it’s time for us to protect our country, rebalance the economy, and put Americans back to work,” he said.
