Capitol Report: Trump tweets tariffs threat on Chinese goods, roiling global markets
President Donald Trump, despite repeated claims by the White House that trade talks with Beijing were progressing, announced Sunday on Twitter that tariffs on $ 200 billion of Chinese goods will increase next week to 25% from 10%.
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump wrote in the surprise announcement.
He also threatened that the U.S. will impose 25% tariffs on another $ 325 billion of Chinese goods, just days after Vice President Mike Pence told CNBC that Trump was hopeful he could hammer out a deal with China.
At last check, futures on the Dow Jones Industrial Average YMM9, -1.73% were off by more than 500 points, or 1.9%. Gold GCM9, +0.20% and the Japanese yen USDJPY, -0.29% , due to their safe-have appeal, were moving higher. In Shanghai SHCOMP, -5.19% stocks were dropping over 5% to pace a broad decline in the region.
Here are Trump’s tweets:
Those tweets surprised Chinese officials, according to a source in the Wall Street Journal, and China’s considering canceling upcoming trade talks altogether. “China shouldn’t negotiate with a gun pointed to its head,” the source said.
Earlier this week, negotiators had reportedly made headway on some of the thornier matters in the trade dispute. According to the Wall Street Journal, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin joined Chinese negotiators in exploring various ways to bridge the divide on several of these longstanding issues, including rolling back punitive tariffs.
Bloomberg economist Tom Orlik said it’s difficult to interpret Trump’s tweets without more information, but, either way, they do add uncertainty to the final stage of the negotiation. “It’s possible talks are breaking down, with China offering insufficient concessions, and an increase in tariffs a genuine prospect,” he said. “More likely, in our view, is that this renewed threat is an attempt to extract a few more minor concessions in the final days of talks.”
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