- US Trade Representative Robert Lighthizer confirmed US tariffs on $US200 billion worth of Chinese goods would increase on Friday at 12:01 a.m. ET.
- The confirmation comes after President Donald Trump tweeted a threat to escalate the trade war.
- Lighthizer and 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 about a year, and the two sides have been engaged in trade talks to end the economic conflict since December 2018.
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The chief trade negotiator for the Trump administration confirmed President Donald Trump’s Sunday tweet, telling reporters that tariffs on $US200 billion worth of Chinese goods would increase on 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 reescalation of the yearlong trade war between the US and China.
According to Lighthizer, the Chinese reneged on key promises made earlier in talks that hoped to craft a deal to end the trade war. Both sides previously seemed confident that a deal was close.
Trump took investors and trade experts by surprise on Sunday when he threatened to increase the tariff rate on $US200 billion worth of Chinese good and apply new tariffs to the remaining $US325 billion of Chinese goods that have so far not been tied up in the trade war.
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 told reporters that attempts to craft a deal were not over and the US is “not breaking off talks at this point.”
As it stands, the US has tariffs on $US250 billion worth of Chinese goods, and China has placed tariffs on $US110 billion worth of American goods. The current round of trade talks 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 $US200 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 has been borne by American companies and consumers.
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