It looks like Trump is going to up the ante on China in order to get them to concede the trade war:
REUTERS – U.S. President Donald Trump’s administration is proposing a tariff rate increase on $200 billion worth of Chinese goods to 25 percent from 10 percent as the two countries continue conversations to determine whether trade talks can be resumed, senior Trump administration officials said on Wednesday.
The officials told reporters on a background call that Trump had directed U.S. Trade Representative Robert Lighthizer to consider the higher tariff rate as part efforts to ensure that it has “the right tools in place in order to encourage China to change its actions.”
The possible change in tariff rate will alter a public comment period for the proposed tariffs on $200 billion worth of goods ranging from Chinese tilapia fish to furniture and lighting products, extending a comment deadline to Sept. 5 from a previously announced deadline of Aug. 30, the officials said.
So far China isn’t budging as Trump had hoped. And they’ve already responded to the higher tariffs, via the NY Times:
“China’s position is firm and clear: pressure and blackmail from the U.S. won’t work,” Geng Shuang, the foreign ministry’s spokesman, said at a briefing on Wednesday in Beijing in response to reports about the 25 percent tariffs. “If the U.S. takes a further and upgraded move, China would definitely retaliate to safeguard our legal rights.”
Talk is cheap, but they may be serious about it – which means the trade war will escalate and get worse while the normal citizenry is caught in the middle. They could also be bluffing, but I guess we’ll find out soon enough.
They are also reporting of the rift in the administration over this tariff increase:
The effort to further punish China is being led by hard-line advisers to Mr. Trump, who see the measure as a way to force Beijing back to the negotiating table on trade. But that approach is once again creating fissures within Mr. Trump’s own team, with his Treasury secretary, Steven Mnuchin, adamantly opposed to ratcheting up the tariffs and Peter Navarro, a key trade adviser, advocating for the higher levies, according to people familiar with the discussions. Stephen K. Bannon, who left the White House in August, has also been counseling the president to pursue tougher levies, according to people familiar with his thinking.
But this is nothing new. There’s always a rift in the administration on this trade issue as Trump likes to hear both sides of the story before he acts. Trump is a protectionist himself, so the rift is normally one way in this administration, with the conservatives getting the shaft.