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Trump seeks additional tariffs on $100 billion of Chinese goods in escalation of trade confrontation

Richard McNulty of Sankey's Feed Mill walks through stacks of feed, which include ground soybean, in Volant, Pa. China plans to tax $50 billion of U.S. products, including soybeans, corn and wheat.
Richard McNulty of Sankey's Feed Mill walks through stacks of feed, which include ground soybean, in Volant, Pa. China plans to tax $50 billion of U.S. products, including soybeans, corn and wheat. (Keith Srakocic/AP)
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President Trump ordered his chief trade negotiator to consider imposing tariffs on an additional $100 billion of Chinese products Thursday, in a dramatic escalation of his trade war with China.

The threat from Trump is the latest volley between the White House and Beijing in an exchange of trade attacks that continue to broaden in scope and severity.

Trump’s latest move would impose tariffs on a significant share of imported Chinese goods that enter the United States — $505.6 billion last year.

It comes a day after China issued a list of tariffs against $50 billion in U.S. goods, including soybeans and small aircraft, in response to recent actions from Trump.

On April 3, President Trump alleged China forged a $500 billion trade deficit with the U.S., just days after the two countries hit each other with tariffs. (Video: The Washington Post, Photo: Jabin Botsford/The Washington Post)

“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” Trump said in a statement Thursday evening.

The president’s latest salvo, moving the world’s two largest economies closer to an open brawl, is certain to spook U.S. allies in Europe and Japan as well as American business leaders, who are desperate for a negotiated resolution of the dispute.

The stock market was closed when the White House released Trump’s statement about the $100 billion in additional tariffs, but Dow futures tumbled more than 300 points, a sign that markets are likely to open down Friday and that Wall Street traders believe a trade war is growing increasingly likely.

Markets in mainland China were closed Friday for the start of a long weekend.

Many in the business community are urging Trump and Chinese President Xi Jinping to reach a settlement before the tariffs go into effect, and Republican lawmakers have been urging the U.S. president to back down.

The threat of tariffs on an additional $100 billion in Chinese goods was “irresponsible and destabilizing,” the Information Technology Industry Council said in a statement.

“We call on both sides to halt unproductive and escalatory rhetoric, recognizing that these words and actions have global consequences,” Dean Garfield, chief executive of the council, said.

The National Retail Federation said the U.S. and China were on a “dangerous downward spiral” that could “spell disaster for the U.S. economy.”

The lawmakers fear a deepening trade war will hurt jobs and businesses in their states, and they worry it could cost Republican votes in the 2018 midterm elections.

“Hopefully the president is just blowing off steam again, but if he’s even half-serious, this is nuts,” Sen. Ben Sasse (R-Neb.) said in a statement Thursday night. “The president has no actual plan to win right now. He’s threatening to light American agriculture on fire.”

The announced level of tariffs almost certainly would lead to American and Chinese consumers facing higher prices at stores for many everyday items.

“ If he’s serious, this is going to start hitting consumer goods and more Americans will feel it,” said Chad Bown, a trade expert at the Peterson Institute for International Economics. “This could hit the Walmart shopper if it goes through.”

Trump’s threat of more tariffs comes amid broadening confusion about the White House approach to trade policy, as it is in the midst of a major personnel change, and Trump has taken to issuing statements and decrees on social media only to have them explained in different ways by aides.

Thursday night’s statement was a prime example. The statement said Trump wanted U.S. Trade Representative Robert Lighthizer to consider imposing “$100 billion of additional tariffs” against China. A spokeswoman for Lighthizer later clarified that they would consider tariffs against $100 billion in goods, not $100 billion in actual tariffs.

Financial markets have wobbled as investors are led by Trump to think that the trade tensions are escalating, and then they are assuaged by another White House official suggesting that things will be resolved peacefully.

One reason for the public confusion is a split between Trump’s economic advisers. White House adviser Peter Navarro has cheered Trump’s adversarial approach to China. Others, particularly National Economic Council Director Larry Kudlow, have suggested that these moves are all part of a grand negotiation that could result with no tariffs taking effect.

But every time aides attempt to soften the edge of Trump’s trade threats, the president takes direct aim at Beijing and declares that he won’t back down until the gap between U.S. imports from China and its exports to that country is dramatically narrowed.

In several bellicose tweets Wednesday, Trump declared: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.”

Recent weeks have seen a ­dizzying exchange of tariff actions, which Patrick Chovanec, a China watcher and chief strategist at Silvercrest Asset Management, compared to the back and forth of “two dogs determined to see which has the loudest bark.”

The tit-for-tat actions began in March with Trump initiating a process to impose tariffs on steel and aluminum imports. He later exempted most major countries except for China.

In response, China on Monday said it would impose tariffs on 128 U.S. exports, including pork and a range of agricultural products that would have a disproportionate impact on American farmers.

On Tuesday, Trump unveiled a list of about $50 billion in Chinese electronics, aerospace and machinery products it plans to hit with steep tariffs.

And then Wednesday, China said it would pursue new import levies on U.S. soybeans, cars and airplanes, targets that would reach much deeper into the American economy and potentially affect hundreds of thousands of jobs.

Trump wanted much bigger tariffs on China initially, but the administration pulled back and crafted a list of more than 1,300 items from China to avoid hitting consumer goods like iPhones, shoes and clothing.

But economists say it will be almost impossible to avoid hurting U.S. consumers with the additional tariffs that Trump is pushing for now.

China exported more than $500 billion in goods to the United States last year, and imposing tariffs on $100 billion worth of goods would have a major impact on the flow of a range of products. In threatening these penalties, Trump is seeking to enforce a 1974 law that gives him the power to direct investigations into what he believes is China’s theft of U.S. intellectual property.

In his statement Thursday evening, Trump said the new tariffs under consideration would be a direct response to China’s retaliation this week. He also said he has “instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests.”

It was unclear precisely what he wanted Agriculture Secretary Sonny Perdue to do. But trade analysts warned that if Trump is considering additional subsidies to protect farmers from Chinese retaliatory tariffs that could expand the U.S.-China trade spat to other powerhouse agricultural countries like Australia, Brazil and Argentina.

“If Trump pays farmers with subsidies, other farmers around the world will object. Suddenly, big agricultural producers in the rest of the world will be drawn into this fight. This has the potential to escalate this way beyond the U.S.-China box,” Bown said.

Trump still left open the possibility that this could be posturing in advance of some sort of trade deal with the Chinese government.

“Notwithstanding these actions, the United States is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people,” he said. “Trade barriers must be taken down to enhance economic growth in America and around the world.”

Trump says the U.S. government has allowed China for decades to flood U.S. consumers with cheap imports that hurt American jobs, leading to the closure of thousands of factories across the country. He won the 2016 election in part by promising to restore many of those jobs, particularly in the Midwest.

So far this year, Trump has threatened a range of countries, including Canada, Mexico, Germany, South Korea and Japan, over their trade practices, but he has reserved his most aggressive attacks for Beijing.

Emily Rauhala contributed reporting from Beijing