Trump Adds Tariffs on $200 Billion in Chinese Goods

As expected, President Donald Trump has imposed tariffs on $200 billion worth of imported Chinese products.

The 10% levy, which will rise to 25% on Jan. 1, will begin on Sept. 24. The new tariffs join levies on $50 billion worth of Chinese goods that took effect last month.

Trump also threatens to quickly tax an additional $267 billion worth of imports if China retaliates with further tariffs on U.S. goods. But the White House says all the new levies will be suspended if China agrees to “serious” negotiations to reform its trade policies.

Specifically, the Trump administration wants China to grant U.S. companies easier access to its home market and stop forcing American businesses to give up intellectual property for the right to do business there.

“We have been very clear about the type of changes that need to be made,” Trump says. “But so far, China has been unwilling to change its practices.”

China insists it won’t negotiate under a cloud of threats. The country has indicated it will respond with $60 billion in new tariffs on U.S. goods. Analysts say China also could impose operating restrictions on American companies already doing business there. And it might freeze exports of certain items considered especially critical to existing U.S. supply chains.

The new tariffs are widely expected to erode profits for companies that import Chinese goods. Business groups warns that the cost of the tariffs, which Trump describes as “a lot of money coming into the coffers of the U.S.,” will be largely passed along to U.S. consumers in the form of higher prices.

Economists figure the new and existing tariffs could reduce economic growth in the U.S. by at least 0.2 percentage points. But they also point out that the robust American economy is better positioned than China’s weakening economic to weather the negative effects of the trade war.