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President Trump announced Sunday that he would raise tariffs on Chinese imports on Friday, unexpectedly setting a new deadline for concluding a comprehensive agreement or triggering an escalation of the long trade war. of a year between the United States and China.
A few days before the expected arrival of Chinese negotiators in Washington, the president has threatened to raise tariffs on Chinese goods worth $ 200 billion, from 10% to 25% Friday, and collect " in the near future "a new 25% tax on the remaining Chinese imports.
[Trump’s washing-machine tariffs cost U.S. consumers $815,000 for every job created]
In a pair of tweets, Trump accused China of trying to "renegotiate" the terms of an agreement that the negotiators have been trying to reach for the past five months.
The turning point ran counter to the recent optimism of the administration and upset the plans for this week's potential final round.
The president's harsh words also took investors by surprise, threatening to bypass a rising market that has increased stocks by more than 20% since the end of December.
Trump has acted out of frustration with the Chinese resistance to some of his most ambitious demands, according to several analysts following the negotiations.
While Chinese negotiators have agreed to increase purchases of US goods, they are unwilling to make major concessions on major US claims, including on Beijing's generous subsidies to favored businesses, said last week American leaders.
"Trump is probably anticipating criticism that we are moving towards a political agreement reached for political reasons rather than a trade deal dealing with fundamental economic tools that allow China to discriminate against foreign companies," said Jeff Moon, who negotiated with China Obama Administration business issues.
Some US officials fear that Beijing will renounce the commitments made in previous rounds. Trump – who is proud of his negotiating skills – is also trying to make noise to the Chinese, said two people who were informed of the talks but were not allowed to speak in public.
Chinese Vice Premier Liu He is expected to arrive in Washington on Wednesday for what was announced as potentially the last round of talks.
Trump's abrupt intervention adds a volatile element to the discussions.
"The trade deal with China is continuing, but too slowly, while they are trying to renegotiate. No! Tweeted the president Sunday.
The US Trade Representative's office, Robert E. Lighthizer, did not receive an immediate response to a request for comment.
Over the past year, Trump has set a series of deadlines to try to attract Chinese concessions. The $ 200 billion tariff increase on Chinese products was originally scheduled for January 1, but the president postponed it for 90 days to allow negotiations with Beijing.
Just before the new deadline of March 1, it was withdrawn again to allow negotiations to continue.
Throughout the discussions, the Chinese have carefully avoided reacting to the presidential tweets. Moon said that he saw very little chance that Chinese President Xi Jinping will cancel the meetings scheduled this week.
"They probably have additional concessions that they save in their pocket for the absolute final phase of the negotiations, so that they can offer minor concessions here just to keep things on track." But I would be surprised if these concessions are not just vague language and unenforceable promises, "said Moon. "Rewarding such a threat would invite more such threats as negotiations progress."
In his tweets on Sunday, the president reiterated his erroneous assertion that "China paid US tariffs" for 10 months. In fact, US importers pay these taxes on importation.
Although Chinese exporters can sometimes lower their prices and absorb some of the tariffs, several recent studies have concluded that most of the financial burden is on the US economy.
"These payments are partly responsible for our excellent economic results," added the president. Traditional economists dispute this.
The American Apparel and Footwear Association, an industry group, urged Trump to abandon his escalating threat. Rick Helfenbein, chairman of the group, said that additional rates "will only hurt US families, American workers, US companies and the US economy."
[Analysis: The worst justification for Trump’s battle with China? The ‘clash of civilizations.’]
National Economics Council Director Larry Kudlow said Sunday that by announcing the potential increase in tariffs, Trump "issued a warning" to China.
"I'm a free trade guy. President's fees, however, have been extremely useful for negotiation. . . . If that does not work, then I think what the president says in today's tweet is that we will continue to apply these rates, "said Kudlow during an appearance on Fox News Channel.
He acknowledged that the imposed tariffs impose costs on US farmers and consumers, but he asserted that the administration had taken steps to help on that front.
Mr. Kudlow also stated that "the structural and enforcement issues remain in effect" with respect to China's business practices.
"China must put an end to its unjust and non-reciprocal trading system. They are breaking the law, "he said.
The president has been talking for months about the prospects for an agreement that would restore relations between the two largest economies in the world. His repeated statements that he was about to make changes to China's state-run economic system have contributed to a sustained recovery in the stock market.
Financial markets may now complain about the resurgence of its pricing threats.
"This has all the qualities of a complete disaster that could cause the stock market to go bankrupt this week," wrote Chris Rupkey, chief economist at Mitsubishi UFJ Financial Group.
Similarly, Gary Shapiro, president of the Consumer Technology Association, said raising tariffs to 25% with just five days' notice would "tarnish our markets, hurt US companies, and severely damage pension funds. to the retreats of the Americans ".
US and Chinese negotiators have been meeting for months to reach an agreement that would resolve Trump's complaints about China's trade practices and the US's chronic trade deficit with China.
The two sides are on the verge of concluding an agreement that should include major new purchases of US goods and a commitment by China to abandon its efforts to steal the trade secrets of US corporate technology or compel companies to give up these information.
Until in the president's tweets, recent statements by the administration had been optimistic about the prospects for an agreement.
Treasury Secretary Steven Mnuchin said last week that the recent talks in Beijing were "productive," an assessment said in a statement to the White House.
Last month, Trump said the two sides were about to sign an "epic" and "monumental" deal that would resolve all its complaints about China's business practices. In recent days, it seemed to be preparing to weaken key demands, including a reduction in massive Chinese subsidies to state-owned enterprises, in order to pave the way for an agreement.
"Unpredictability is the hallmark of this administration," said Scott Kennedy, China expert at the Center for Strategic and International Studies. "No one can count on an agreement with China until the deal is fully negotiated and the ink is dry."
Felicia Sonmez and Damien Paletta contributed to this report.
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