WASHINGTON--U.S. President Donald Trump on Friday ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China, underscoring a lack of progress by U.S. and Chinese negotiators in talks aimed at ending an escalating trade war.
Trump's move would subject about $300 billion worth of Chinese imports to punitive tariffs, U.S. Trade Representative Robert Lighthizer said in a statement. Lighthizer said a final decision has not been made on the new duties, which would come on top of an early Friday tariff rate increase to 25% from 10% on $200 billion worth of Chinese imports.
Despite the escalation in tariffs, Trump and Chinese Vice Premier Liu He said they would press on with more talks, avoiding the worst-case scenario of a complete breakdown of negotiations between the world's two largest economies. "Over the course of the past two days, the United States and China have held candid and constructive conversations on the status of the trade relationship between both countries," Trump said on Twitter.
"In the meantime, the United States has imposed Tariffs on China, which may or may not be removed depending on what happens with respect to future negotiations!" Trump said.
Liu later told Chinese state media that China and the United States had agreed to hold more talks in Beijing. He said differences remained over "principal issues" but that the talks were constructive and had not broken down.
China dealt the talks a major setback last week by proposing extensive revisions to a draft trade agreement. China wanted to delete prior commitments that Chinese laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
The issue dominated the talks between Liu, Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Thursday and Friday, and two people familiar with the discussions said no progress was made as Liu sought to defend the changes.
The top economic adviser to Chinese President Xi Jinping argued that China could accomplish the policy changes through decrees issued by its State Council, or cabinet, the sources said. But Lighthizer rejected this, telling Liu that the United States was insisting on restoration of the previous text.
Major U.S. stock indexes, which had fallen sharply through the week as investors worried that the 10-month-old trade war could spiral out of control, reversed course to close higher after Mnuchin also called the talks "constructive." Yields on U.S. government debt also drifted higher after the end of the talks.
In earlier tweets, Trump defended the tariff hike and said he was in "absolutely no rush" to finalize a deal, adding that the U.S. economy would gain more from the levies than any agreement.
Despite his insistence that China will absorb the cost of the tariffs, it is U.S. businesses that will pay them and likely pass them on to consumers. It may take three or four months for American shoppers to feel the pinch, economists and industry consultants say.
Following the U.S. tariff hike, China's Commerce Ministry said it would take countermeasures but did not elaborate. China responded to Trump's tariffs last year with levies on a range of U.S. goods including soybeans and pork.
