President Donald Trump appears to be shutting the door on a temporary ceasefire in an ongoing tit-for-tat trade war with China just days ahead of an upcoming summit in Argentina.
The President told the Wall Street Journal in an interview published Monday that it was “highly unlikely” he would accept an offer by Chinese leader Xi Jinping aimed at averting Trump’s plan to raise tariffs on more than $200 billion of Chinese goods to 25% in January.
He also warned once again he was poised to slap a third round of tariffs on Chinese goods if the two leaders fail to broker an end to the trade rift when they meet later this week in Buenos Aires, Argentina, on the sidelines of the G20 summit.
“If we don’t make a deal, then I’m going to put the $267 billion additional on,” said Trump in the interview, adding the tariff level could either be 10% or 25%.
Trump said in the interview that could include tariffs on Apple products imported from China, including iPhones and laptops. Apple’s stock fell 1.5% in after-hours trading, erasing earlier gains from the day.
“Maybe. Maybe. Depends on what the rate is,” the president said. “I mean, I can make it 10%, and people could stand that very easily.”
The tariffs have drawn complaints from American businesses, who are responsible for paying the import duties. It’s also spurred concerns about renewed inflation, just as the Federal Reserve is set to raise interest rates in December.
More than 100 S&P companies have already pre-emptively telegraphed during the third quarter earnings calls the damage further tariffs would impose on the US economy. Multiple companies including Walmart, the country’s biggest retailer, have warned that prices on everyday goods like shampoo, detergents and paper goods — such as napkins — will get more expensive for consumers.
In the lead-up to this weekend’s leaders meeting, Trump surrogates have continuously warned Beijing negotiators that threats by the President should be taken seriously.
Vice President Mike Pence said earlier this month that Trump wasn’t in any rush to end the trade war and was willing to “more than double” the tariffs it has already placed on $250 billion in Chinese goods. The United States “will not change course until China changes its ways,” Pence said in his speech at the Asia-Pacific Economic Cooperation summit in Papua New Guinea.
The upcoming meeting is the only imminent opportunity for a direct encounter between Trump and Xi before the January 1 deadline, and investors are eagerly looking for signs for a truce between the two sides.
Speaking on the South Lawn with reporters, Trump hedged bets on any possible deal making with his Chinese counterpart. “It could happen. They have to treat us fairly,” he said.
While so far much of the attention on the undo harm of the existing tariffs has fallen on China, political scientists and economists also warn there could be deeper ramifications for American corporations, if the Chinese opt to restrict American investment.
“A lot of the problem for business is uncertainty,” said David Dollar, a senior fellow in the John L. Thornton China Center at the Brookings Institution and a former economic and financial emissary to China for the Treasury Department under President Barack Obama. “They can live with whatever policy regime there is whether we are taxing everything from China or not. They just hate the uncertainty.”