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- US Trade Representative Robert Lighthizer confirmed US tariffs on $200 billion worth of Chinese goods will increase Friday at 12:01 a.m. ET.
- The confirmation comes after President Donald Trump tweeted a threat to escalate the trade war.
- Lighthizer and the US Treasury Secretary Steve Mnuchin told reporters the increase was in response to China’s sudden reversal on previously made trade deal commitments.
- The US and China have been locked in a trade war for roughly a year and the two sides have been engaged in trade talks to end the economic conflict since December 2018.
- Visit Business Insider’s homepage for more stories.
The chief trade negotiator for the Trump administration confirmed President Donald Trump’s Sunday tweet, telling reporters that tariffs on $200 billion worth of Chinese goods will increase Friday at 12:01 a.m. ET.
According to US Trade Representative Robert Lighthizer the 10% tariff rate will rise to 25%, as Trump threatened. Lighthizer and Treasury Secretary Steven Mnuchin said the increase was triggered by China’s sudden reversal on key agreements in trade talks.
"Over the course of the last week or so, we have seen an erosion in commitments by China, I would say retreating from specific commitments that had already been made," Lighthizer said, adding the reversal is "unacceptable."
The move marks a sudden re-escalation of the yearlong trade war between the US and China.
According to Lighthizer, the Chinese reneged on key promises made earlier in talks that aim to craft a deal to end the trade war. Both sides previously seemed confident that a deal was close at hand.
Trump took investors and trade experts by surprise on Sunday in which he threatened to increase the tariff rate on $200 billion worth of Chinese good and apply new tariffs to the remaining $325 billion of Chinese goods that have so far not been tied up by the trade war.
The threat led to a substantial sell-off in global markets, though the major US indexes recovered through Monday’s trading.
The threat also comes as a Chinese delegation is set to travel to Washington to discuss a trade deal on Thursday and Friday. There was initially uncertainty over whether the envoy from Beijing would attend after Trump’s threat and it is still unclear if Vice Premier Liu He, the country’s top economic official, will join the delegation.
Lighthizer reassured reporters that attempts to craft a deal were no over and the US is "not breaking off talks at this point."
As it stands, the US has tariffs on $250 billion worth of Chinese goods and China has place tariffs on $110 billion worth of American goods. The current round of trade talks were kicked off in December when Trump and Chinese president Xi Jinping reached a trade truce during the G20 summit in Argentina.
The 10% tariff on $200 billion worth of Chinese goods was originally supposed to increase on January 1, but that was delayed to March 1. After the two sides made progress on the talks, the increase was suspended indefinitely just before the March 1 deadline.
Economists have warned an escalation of the trade war is the biggest threat to the US economy and multiple studies have shown that a predominate amount of the burden from Trump’s tariffs have been borne by American companies and consumers.
See Also:
- Treasury Secretary Mnuchin officially refuses to give Trump’s tax returns to Democrats, setting up high-stakes showdown
- Trump threatens seismic shift in trade war with China, suggesting new tariffs on $325 billion worth of Chinese goods
- The White House sent a letter to AG Barr complaining about the release of the ‘political’ Mueller report
Source: Business Insider – bbryan@businessinsider.com (Bob Bryan)