White House Ratchets Up Trade Fight

U.S. trade representative says U.S. to raise tariffs to 25% on $200 billion in Chinese goods. Prospects for a speedy conclusion to the U.S.-China trade fight dimmed Monday after U.S. officials accused Beijing of reneging on its promises and vowed to implement President Trump’s threat to raise tariffs quickly on Chinese imports.

“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made, in our judgment,” said U.S. Trade Representative Robert Lighthizer, declaring tariffs on $200 billion in Chinese imports would rise to 25% starting Friday, May 10.

Tariffs will be increased to 25% on May 10 for all items on the list at the below link.

  • Stage 3—10% import tariff  on 24/9/2018, increasing to 25% on 1/1/2019 on 5,745 U.S. imports (final, about $200 billion of U.S. imports from China). Increase to 25% delayed until 1/3/2019 (Mar 1, 2019), … further delayed on 24/2/19 and suspended on Feb 27, 2019 “until further notice.” On May 7, USTR Lighthizer announced the increase to 25% would take effect on May 10.

 

The comments from Mr. Lighthizer, who was joined by Treasury Secretary Steven Mnuchin, followed tweets from President Trump on Sunday that accused China of trying to “renegotiate” and threatened to expand tariffs to cover nearly everything the U.S. imports from China.

The briefing from Messrs. Lighthizer and Mnuchin, which took place after U.S. markets closed on Monday, made it clear there are deep concerns about the direction of the talks that go beyond negotiating style.

In a show of unity by an administration often divided between trade-friendly officials and China hawks, the two officials were joined at Monday’s briefing by economic adviser Larry Kudlow and trade-and-manufacturing adviser Peter Navarro.

“We are not willing to go back on documents that have been negotiated,” Mr. Mnuchin said.

The two officials declined to specify areas where they think the Chinese side as backtracking. “There was concern about the form of the agreement and a redrafting of it” that would pull back from important commitments, Mr. Lighthizer said.

According to White House officials, the dispute revolves in part around how a final deal would be presented to the public. The U.S. wants to publish full details of the pact, while China just wants to release a summary of the terms, one of the officials said.

Mr. Trump sees his administration as negotiating from a position of strength, founded on a rock-solid U.S. economy. Gross domestic product in the first quarter rebounded from the end of 2018, with growth clocking in at a seasonally adjusted annualized rate of 3.2%, up from 2.2% the prior quarter.

The jobs report for April, released on Friday, showed the U.S. economy adding a robust 263,000 jobs in April and the unemployment rate falling to 3.6%, the lowest in nearly 50 years.

Those results have even some of Mr. Trump’s staunchest critics, including Senate Democratic leader Chuck Schumer of New York, supporting the president’s hard line on China.

Lighthizer said he plans to publish the required Federal Register notice as soon as Thursday, formally setting in motion the increase, which would take effect Friday. In response to a question about the effect of a sudden tariff jump on American companies that have goods en route from China, Lighthizer said companies had received adequate warning of the import levies over months of trade talks.

Sources:

https://www.wsj.com/articles/lighthizer-says-china-reneging-on-trade-talk-commitments-11557176867?mod=hp_lead_pos1

https://www.washingtonpost.com/business/economy/trump-administration-accuses-chinese-officials-of-reneging-on-earlier-commitments-in-trade-talks/2019/05/06/808e91f4-7037-11e9-8be0-ca575670e91c_story.html?utm_term=.b4746a38da5f

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