Trump administration confirms plan to raise China import tariff to 25 per cent

Workers process tilapia fish fillets at a workshop in Wenchang, Hainan province, China. PHOTO: REUTERS

WASHINGTON/BEIJING (REUTERS) - United States President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 per cent tariff on US$200 billion (S$270 billion) worth of Chinese imports, his administration said on Wednesday (Aug 1).

US Trade Representative (USTR) Robert Lighthizer said Trump directed the increase from a previously proposed 10 per cent duty because China has refused to meet US demands and has imposed retaliatory tariffs on US goods.

"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 behaviour and adopt policies that will lead to fairer markets and prosperity for all of our citizens," Lighthizer said in a statement.

There have been no formal talks between Washington and Beijing for weeks over Trump's demands that China make fundamental changes to its policies on intellectual property protection, technology transfers and subsidies for high-technology industries.

Two Trump administration officials told reporters on a conference call that Trump remains open to communications with Beijing and that through informal conversations, the two countries are discussing whether a "fruitful negotiation" is possible.

"We don't have anything to announce today about a specific event, or a specific round of discussions, but communication remains open and we are trying to figure out whether the conditions present themselves for a specific engagement between the two sides," one of the officials said.


The higher tariff rate, if implemented, would apply to a list of goods valued at US$200 billion identified by the USTR last month as a response to China's retaliatory tariffs on an initial round of US tariffs on US$34 billion worth of Chinese electronic components, machinery, autos and industrial goods.

The USTR said it will extend a public comment period for the US$200 billion list to Sept 5 from Aug 30 due to the possible tariff rate rise.

The list, unveiled on July 10, hits American consumers harder than previous rounds, with targeted goods ranging from Chinese tilapia fish and dog food to furniture, lighting products, printed circuit boards and building materials.

China said on Wednesday that blackmail would not work and that it would hit back if the United States takes further steps hindering trade, including applying the higher tariff rate.

"US 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 told a regular news briefing.

Investors fear that an escalating trade war between Washington and Beijing could hit global economic growth. And prominent US business groups, while weary of what they see as China's mercantilist trade practices, have condemned Trump's aggressive tariffs.

In early July, the US government imposed 25 per cent tariffs on an initial US$34 billion of Chinese imports. Beijing retaliated with matching tariffs on the same amount of US exports to China.

Washington is preparing to also impose tariffs on an extra US$16 billion of goods in the coming weeks, and Trump has warned he may ultimately put them on more than half a trillion dollars of goods, roughly the total amount of US imports from China last year.

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