US President Donald Trump has warned Beijing that he may hit Chinese goods with another $300 billion in tariffs if necessary, but added that he still hopes for a deal. The levies would target China’s remaining exports to the US.
“Our talks with China, a lot of interesting things are happening. We’ll see what happens… I could go up another at least $300 billion and I’ll do that at the right time,” Trump told reporters on Thursday, as cited by Reuters. The president did not elaborate on what goods could be targeted by the hikes.
However, Trump says he thinks that China and another country embroiled in a trade row with Washington, Mexico, wants to make a deal. Earlier, Trump threatened to impose a five-percent duty on all Mexican goods starting next week.
“I think China wants to make a deal and I think Mexico wants to make a deal badly,” he said before boarding Air Force One on his way to France for D-Day commemorations.
The simmering trade war between the world’s two biggest economies has already seen an exchange of several rounds of mutual tariff hikes. Almost one year ago, in July 2018, Trump started the row by slapping Beijing with 25-percent tariffs on $50 billion worth of Chinese technology goods, drawing a similar response from China.
Later that year, the White House imposed 10-percent tariffs on $200 billion worth of Chinese imports varying from chemicals to consumer goods, in a bid to pressure Beijing into making trade concessions. China struck back, adding $60 billion of American products to its import tariff list.
The US had initially threated to further raise tariffs to 25 percent, but put the action on pause while the two countries were holding lengthy trade talks. However, the attempt to reach a deal to avert further escalation failed in May this year. The Trump administration increased the tariff rate on Chinese goods to 25 percent, and further threatened to impose the same hikes on the rest of the country’s imports into the US.
It did not take Beijing long to hit back. On June 1, China hiked tariffs to 25 percent on 5,000 US products worth $60 billion. Beijing also threatened to use its advantage in rare earth metals production as leverage in the trade war, with government media saying that China may ban their export. The materials are vital for various industries, especially in the military and high tech.