U.S. President Donald Trump applauds while walking on the South Lawn. Photo: Al Drago/Bloomberg via Getty Images
President Trump tonight says he's directed the U.S. Trade Representative to consider an additional $100 billion in tariffs on China, and that the administration may take other actions to "protect our farmers and agricultural interests." The White House says it's announcing these new measures "in light of China's unfair retaliation" to an earlier $50 billion in proposed tariffs.
Why it matters via Jonathan Swan: This is exactly what the free traders who formerly worked in the White House feared, Trump in a macho pissing match against Chinese President Xi. Trump has a blunt understanding of leverage and believes the worst thing he can show is weakness. He also believes, as he tweeted, that the U.S. already is so far down on the scorecard with China that he’s got nothing to lose.
Trump's new economic adviser Larry Kudlow made the rounds on television yesterday to say the first round of tariffs were a prelude to negotiations and that "backchannel talks" were already going on. Tonight's statement says the U.S. "is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade."
The possible response from Axios China author Bill Bishop:
And this from Global Times editor-in-chief Hu Xijin:
Market reaction from Bloomberg's Joe Weisenthal:
Full White House statement:
Following a thorough investigation under section 301 of the Trade Act of 1974, the United States Trade Representative (USTR) determined that China has repeatedly engaged in practices to unfairly obtain America’s intellectual property. The practices detailed in the USTR’s investigation have caused concern around the world. China’s illicit trade practices − ignored for years by Washington − have destroyed thousands of American factories and millions of American jobs. On April 3, 2018, the USTR announced approximately $50 billion in proposed tariffs on imports from China as an initial means to obtain the elimination of policies and practices identified in the investigation.
Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers. In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs. I have also 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.
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. Trade barriers must be taken down to enhance economic growth in America and around the world. I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests.