UPDATE: The United States has escalated the trade war with China with the implementation of a tariff increase from 10% to 25% on $200 billion of Chinese goods, effective at 12:01 AM on Friday, May 10.
In a series of early morning tweets on Friday, President Trump defended his decision to raise tariffs, saying there was no need to rush into a deal and adding that the American economy would be boosted more by the tariffs than by a trade deal. China has threatened retaliation for the tariffs but has not provided details, according to a Reuters report.
Negotiators will continue to work on the trade deal today in Washington in the hopes that an agreement can be reached.
The increase comes in the middle of talks in between U.S. and Chinese officials. Reuters reported that China had backtracked late last Friday on almost all aspects of a draft trade agreement between the two countries. Sources familiar with the talks said China’s latest demands for changes to a 150-page document that had been drafted over several months would make it difficult to avoid the U.S. tariff hike on Friday. That increase would affect Chinese imports from computer modems and routers to vacuum cleaners, furniture, lighting and building materials.
Trump said on Wednesday he would be happy to keep tariffs on Chinese imports in place. “The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” Trump tweeted Wednesday morning. “Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers,” he added.
Retail Reaction
Earlier this week, David French, the NRF’s Senior Vice President for Government Relations, said: “Tariffs are taxes paid by American businesses and consumers, not by China. A sudden tariff increase with less than a week’s notice would severely disrupt U.S. businesses, especially small companies that have limited resources to mitigate the impact. If the administration follows through on this threat, American consumers will face higher prices and U.S. jobs will be lost. We want to see meaningful changes in China’s trade practices, but it makes no sense to punish Americans as a negotiating tactic.
“If the administration wants to put more pressure on China, it should form a multinational coalition with our allies who share our concerns. We urge the administration to reconsider this tax hike on Americans and stay at the bargaining table until a deal is reached.”
*This is an evolving story. We'll continue to post updates as they come in.