Trump Threatens to Raise Chinese Tariffs to 25%, Asian Stocks Fall

Trump’s comments came as a Chinese delegation was scheduled to resume talks in Washington on Wednesday.

US President Donald Trump (left) Chinese President Xi Jinping (right). 

(Photo: AP)

US President Donald Trump turned up the pressure on China on Sunday, 5 May, threatening to hike tariffs on 200 billion dollars worth of Chinese goods, reported AP.

Trump's comments, delivered on Twitter, came as a Chinese delegation was scheduled to resume talks in Washington on Wednesday, 8 May, aimed at resolving a trade war that has shaken financial markets and cast gloom over the world economy.

Trump turned up the heat by saying he would raise import taxes on 200 billion dollars in Chinese products from 10 percent to 25 percent on Friday.

He had twice pushed back deadlines in January and March to raise the tariffs in a bid to buy more time for a negotiated settlement.

But on Sunday, Trump, who has called himself a "tariff man," said he's losing patience.

Are Trade Negotiations Nearing Final Round?

The two countries are locked in a high-stakes dispute over China's push to establish itself as a technological super power.

The US charges that China is resorting to predatory tactics including cybertheft and forcing foreign companies to hand over technology in a drive to establish Chinese companies as world leaders in advanced industries such as robotics and electric vehicles.

Last July, the Trump administration gradually began slapping import taxes on Chinese goods to pressure Beijing into changing its policies.

It now has imposed 10 percent tariffs on 200 billion dollars in Chinese imports and 25 percent tariffs on another 50 billion dollars.

The administration has repeatedly suggested that the negotiators are making progress.

A month ago, Trump said the two countries were "rounding the turn" and predicted that "something monumental" would be achieved in the next few weeks.

But last week, Treasury Secretary Steven Mnuchin seemed to temper expectations, suggesting that Washington was willing to "move on" if it can't get the deal it wants.

Asian Stocks Tumble on Tariff Threat

A substantive deal would require China to rethink the way it pursues its economic ambitions, abandoning or scaling back subsidies to its companies, easing up on the pressure for foreign companies to share trade secrets, and giving them more access to the Chinese market.

Philip Levy, senior fellow at the Chicago Council on Global Affairs and a White House economist under President George W Bush, said the talks are too complicated for Trump's high-pressure tactics to work.

"The president treats this like we're haggling over the price of a used car," Levy said.

The prospect of higher tariffs and heightened tensions could alarm investors when markets open Monday.

"When the president puts his foot down, it makes the market go down," Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in a research note Sunday.

"Tariff man is back just in time to make the stock market dive, dive, dive." Rupkey said.

The move prompted sharp fall in stocks in the Asia Pacific on Monday, with China’s yuan plunging the most in three years.

The yuan slumped as much as 1.3 percent against the dollar, and Chinese shares tumbled more than 5 percent when the market opened after a holiday, Bloomberg reported.

(With inputs from AP and Bloomberg.)