White House Considers Raising China Tariffs to 25 Percent

August 1, 2018 Updated: August 1, 2018    

The White House is mulling whether to boost tariffs on $200 billion worth of goods to 25 percent, up from the 10 percent announced in early July, according to U.S. Trade Representative Robert Lighthizer.

President Donald Trump directed Lighthizer to consider boosting the duties earlier this week, according to a statement from the trade representative’s office. A senior official told reporters that Trump considered the previous 10 percent tariff “weak.”

The trade representative’s office will request feedback from businesses on both the 10 and 25 percent tariffs. A final decision is not expected earlier than September.

The announcement came as trade talks between the two nations reached an impasse and Washington needed additional leverage to bring China to the table. It also followed a steady slide in the value of the yuan, which makes Chinese goods more competitive on the international market.

“The Trump administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear about the specific changes China should undertake,” Lighthizer said in a statement. “Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers, and businesses.

“The increase in the possible rate of the additional duty is intended to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens.”

The Trump administration has already levied duties on $34 billion worth of Chinese goods. Beijing responded with tit-for-tat tariffs on American products, including a list of farm goods. Washington demonstrated that it won’t bend to the countermeasure and announced billions in aid for farmers and producers hit by the retaliatory duties.

The White House believes that the United States has more ammunition in a trade fight with the American economy heating up while China’s economy is cooling down.

Trump is using tariffs to force China to lower trade barriers, stop intellectual property theft, and agree on a reciprocal trade agreement. Beijing has not officially budged on any front.

China said on Aug. 1 that “blackmail” would not work and that it would hit back if the United States takes further steps to hinder trade, including applying the higher tariff rate.

“U.S. pressure and blackmail won’t have an effect. If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights,” Chinese Foreign Ministry spokesman Geng Shuang said.

Washington is preparing to also impose tariffs on an extra $16 billion of goods in coming weeks, and Trump has warned he may ultimately put them on over half a trillion dollars of goods.

Reuters contributed to this report.