Trump Increases China Tariffs as Trade Deal Hangs in the Balance
Stock markets fell Thursday in the United States, but pared some of those losses after Mr. Trump’s comments in the afternoon. The S&P 500 index ended the day down less than 0.5 percent.
Talks resumed at 5 p.m. on Thursday at the offices of the United States trade representative, and Steven Mnuchin, the Treasury secretary, and Robert Lighthizer, Mr. Trump’s top trade negotiator, continued them over a dinner with Mr. Liu and some members of the Chinese delegation.
The new 25 percent rate went into effect at 12:01 a.m. Friday. But the higher tariffs will hit only products that leave China after that time, not those already in transit. That could provide some additional time for the two sides to reach an agreement. Mr. Trump may also be able to rescind the tariffs once a deal is reached, retroactively reversing the higher rates.
“This week is really a challenge if you’ve got boats on the ocean,” said Brian Keare, the field chief information officer at Incorta, who advises companies like Broadcom, Starbucks and Apple on scenario planning amid the uncertainty they face under the Trump administration. “If I’ve got 30 days’ notice, I can make a smarter decision. If I’ve got 72 hours, my hands are more tied.”
China, which has already placed tariffs on nearly all of America’s exports, including agriculture products, has threatened to respond with additional “countermeasures” to Mr. Trump’s latest tariff.
Lyle Benjamin, the president of the Montana Grain Growers Association, said that China had essentially stopped buying American wheat since last year. He was hopeful that a trade truce would change that, but now he expected prices to keep falling.
“It’s highly frustrating, particularly in the agricultural sector, to be collateral damage as we try to achieve these trade goals for other industries,” Mr. Benjamin said. “It’s a tough game right now and it’s tied almost entirely to this trade war.”