Trump imposes tariffs on $200 billion more of Chinese goods

Shipping containers from China awaited transportation at the Port of Long Beach, Calif.
Shipping containers from China awaited transportation at the Port of Long Beach, Calif.(Frederic J. Brown/AFP/Getty Images/File)

President Trump, emboldened by the United States’ economic strength and China’s slowdown, escalated his trade war Monday, saying the United States would impose tariffs on $200 billion worth of Chinese goods as punishment over Beijing’s trade practices.

The fresh round of tariffs comes on top of $50 billion worth of Chinese products taxed this year, meaning nearly half of all Chinese imports into the United States will soon face tariffs. The new wave is scheduled to go into effect Sept. 24, with tariffs starting at 10 percent before climbing to 25 percent by the end of the year. The timing will partially reduce the toll of price increases for holiday shoppers buying Chinese imports in the coming months.


The White House also said the United States was prepared to “immediately” place tariffs on another $267 billion worth of imports “if China takes retaliatory action against our farmers or other industries.”

The move is aimed at pressuring China to change long-standing trade practices that Trump says are hurting US businesses at a moment when the administration believes it has an advantage in the trade dispute. China’s economy is slowing, with consumers holding back and infrastructure spending dropping sharply. The Chinese slowdown is expected to worsen as the US tariffs ramp up. The United States, by contrast, has continued to experience robust economic growth, including the lowest unemployment rate since 2000.

White House officials said Monday that China could win relief from the tariffs by acceding to the administration’s trade demands, including allowing US companies greater access to the China market and dropping its requirement that US companies hand over valuable technology to Chinese partners. Officials said the United States would continue trade negotiations only if the Chinese were “serious” about giving ground on those issues.

But while the tariffs are aimed at hurting China, they could hamper the US economy and bring pain for consumers. Unlike the first round of tariffs, which were designed to minimize the impact on US consumers, this wave could raise prices on everyday products including electronics, food, tools, and housewares.


Retailers, manufacturers, and a wide swath of other US businesses have warned that the new tariffs could hurt their profits, hiring, and growth. The administration held six days of public hearings on the proposed $200 billion round of tariffs in August, which were dominated by companies warning that the United States no longer had the capacity to produce replacement products for the Chinese imports that would be hit by tariffs.

Economists warn the tariffs could chip away at US economic growth. Morgan Stanley researchers estimate that the latest round could reduce economic growth in the United States this year by 0.1 percentage point, adding to another 0.1 percentage-point drag from tariffs currently in place. And the effects are likely to grow if China retaliates again, as it has threatened to do.

Trump’s decision is a significant escalation of an already serious trade dispute between the world’s two largest economies — one with seemingly no end in sight. After months of failed trade talks, top officials from China and the United States were tentatively scheduled to talk this month in Washington. But it is unclear whether Beijing will agree to come to Washington with the new tariffs set to go into effect.

“We are open to talk if there are serious talks,” Larry Kudlow, director of the National Economic Council, said Monday.


Yang Weimin, deputy director for economic affairs at the Communist Party’s top advisory body, said at the China Development Forum in Beijing on Sunday that China would not negotiate while under pressure.

China is expected to further retaliate against the United States, and top officials have warned that could include penalizing US companies that rely on Chinese components for phones, cars, televisions, and other products.

China’s Commerce Ministry has said that it is ready to put similar tariffs on $60 billion a year of US goods in response to the threat from the United States. China has matched previous tariff moves dollar for dollar, but the number of US goods to tax is dwindling because, for many years, it has imported only about one-quarter as much as it exports to the United States.

US businesses — which have warned that tariffs could hurt profits, force job cuts, and, in some cases, destroy companies, said the taxes were going to hurt the United States more than the administration realized. The National Association of Chemical Distributors released a study this month that predicted nearly 28,000 chemical distributor and supplier jobs would be eliminated because of higher prices from the $200 billion round of tariffs.

“These tariffs are going to be paid for by the working families who drive our economy,” said Jonathan Gold, a spokesman for a business group formed to fight tariffs called Tariffs Hurt the Heartland. “Tariffs are taxes, plain and simple. By choosing to unilaterally raise taxes on Americans, the cost of running a farm, factory or business will grow.”


The total wave of tariffs thus far has not been large enough to meaningfully affect consumer prices broadly across the economy — only narrowly, for certain products. Economists warn that the effects could grow noticeably larger if Trump follows through with his threat to subject nearly all Chinese imports to tariffs.