WASHINGTON _ Amid reports that the U.S. is preparing tariffs on an additional $200 billion of Chinese imports, President Donald Trump said Monday his administration planned to make a formal announcement after financial markets stopped trading for the day.
"It will be a lot of money coming into the coffers of the United States of America," he told reporters Monday afternoon without discussing details.
The sharp escalation of the administration's trade fight with China would ratchet up pressure on Beijing, but also exact pain on a much broader spectrum of American businesses and consumers.
Trump's top economic adviser, Larry Kudlow, confirmed on Monday various reports of forthcoming tariffs. Earlier in the day, Trump seemed to hint of new action by tweeting that tariffs have given "new life" to the U.S. steel industry and have "put the U.S. in a very strong bargaining position."
Trump already has hit China with tariffs on about $50 billion of imports and is mulling more. Treasury Secretary Steven T. Mnuchin last week sent overtures to Beijing for renewed high-level trade talks, but Trump's apparent decision to go ahead with the new tariffs could scuttle the proposed meeting.
"We still await serious talks," Kudlow said in an interview with CNBC.
Beijing's decision on whether to meet could be affected by the timing of the new tariffs. Perhaps as a gesture to keep China from refusing the invitation to talks, Trump administration officials were also said to be preparing a smaller 10 percent tariff on the $200 billion of Chinese imports as opposed to 25 percent duties that were imposed earlier this summer.
Still, if the new tariffs take effect, the United States will have imposed significant taxes on about half of all Chinese merchandise entering American borders. The U.S. imported $505 billion of Chinese products last year.
The earlier round of tariffs affected mostly Chinese machinery and industrial parts, intermediary materials and components largely invisible to consumers. But the new duties will ensnare many ordinary household goods. At about $70 billion, cellphones account for the largest product category from China.
Retailers and dozens of trade groups have urged Trump not to go through with the new tariffs, warning that they will wreak havoc on company supply chains and hurt consumers who will inevitably face higher prices. Some have questioned the legality of Trump's actions.
Besides U.S. importers, businesses that export to China also are almost certain to be subjected to additional retaliation from Beijing. Chinese officials responded to the earlier tariffs by issuing duties on American imports of an equal amount, targeting farm goods for maximum political impact.
The Trump administration has argued, however, that the tariffs have not hurt the broader economy and that they will be good for reforming an unfair trading system in the long run. "The tariff story may be a very good force for good," Kudlow said. "People want to blame President Trump for fixing a broken system."
Even as businesses, politicians and former trade officials broadly agree on the need to address China's mercantilist economic behavior, many have criticized what they view as Trump's heavy-handed and often indiscriminate use of tariffs, directed at allies and adversaries alike.
Many worry that the escalating trade war will slow growth, hurt financial markets and destabilize the global economy. The Trump administration is betting that China, with its economy slowing and more dependent on exports than the U.S., will cave to American demands. Trump wants Beijing to take dramatic steps to reduce its trade deficit and curb predatory economic behavior.
China experts, however, do not see Beijing backing down anytime soon. Chinese officials have taken steps that seem to be preparing for a protracted fight, ramping up stimulus to help offset trade losses and pushing domestic firms to pursue alternatives to the U.S. market.
Moreover, with Beijing having moved away from collective leadership to concentrated power in one man, President Xi Jinping, the central government is even less likely to capitulate, said David Loevinger, of TCW Emerging Markets Group in Los Angeles and formerly a senior Treasury Department official for China affairs. "Xi can't be seen as weak," he said.
Loevinger called Trump's tariff policy a "sawed-off shotgun" approach to trade. "Plenty of other suppliers and workers will get hit, including in the U.S.," he said of Trump's expected new tariffs.
Susan Schwab, who served as U.S. trade representative in the George W. Bush administration, said she doesn't like tariffs. But she also noted that China's "bad behavior" has been going on for a long time and it is too early to judge whether Trump's tariff strategy has been effective.
"This administration has gotten their attention," she said at a forum Monday at the Center for Strategic and International Studies.
