The Trump administration is planning to escalate the U.S. trade war with China by targeting around $200 billion in Chinese goods, according to the Wall Street Journal. The move is expected to draw a reciprocal response from China, which will likely impose new retaliatory tariffs on U.S. exporters, especially farmers, the newspaper reported.
The administration is expected to set the tariffs at around 10 percent, which is lower than the 25 percent tariffs that were announced in early August, sources told the Journal.
The move is intended to give the U.S. leverage in planned high-level discussions with Beijing over its practice of demanding American companies turn over technology to do business in China. However, the new tariffs are expected ahead of the midterm elections and the holiday shopping season and will likely result in the increased costs on thousands of products for American consumers, including dishwashers, Fitbit fitness trackers, and food seasonings, according to CNN.
The Trump administration originally imposed the tariffs despite the pleas from members of his own administration, including his former top economic adviser Gary Cohn, whose objections were chronicled in Fear, reporter Bob Woodward’s new bestselling book about the Trump White House’s inner workings. Cohn and others warned that a trade war with China would affect a number of U.S. industries including U.S. auto manufacturers. Trump, who is said to have referred to Cohn as a “fucking globalist,” opted to instead heed the advice of his trade adviser Peter Navarro — an economist who believes in fringe “America First” trade policies that have been dismissed by most economists.
The U.S. has, so far, imposed $50 billion in tariffs on Chinese imports — prompting China to respond in kind, causing the U.S. trade deficit to grow for the second month in a row. The U.S.’s trade deficit with China widened in July by the largest gap in the past three years.
Many U.S. firms are fearful over what an escalated trade war with China will do not only to consumer costs — and their bottom line. Panicked American businesses whose survival has jeopardized by these escalations have been urging the administration to get their goods off the tariff list — around 4,000 such comments have already been sent to U.S. trade representative Robert Lighthizer.