Trump Is Frustrated That China Hasn’t Caved to His Trade War Yet. Here’s How He Could Escalate the Fight Further

August 1, 2018, 11:06 AM UTC

Concerned that the U.S.’s tariffs on Chinese imports still haven’t had the desired effect of getting the Chinese to cave in to American trade demands, the Trump administration is reportedly considering amping up the pressure even more than was previously proposed.

Weeks after the White House said it wanted to slap 10% tariffs on an additional $200 billion worth of Chinese imports, President Donald Trump’s advisors are reportedly urging him to make it 25% instead. All this is on top of a 25% tariff on $34 billion in goods that’s already gone into effect, and similar tariffs that are about to go into effect on another $16 billion in Chinese goods.

“Once you go down the road of using tariffs to disrupt the Chinese, you have to say 25% compared to 10%,” Derek Scissors of the American Enterprise Institute, which advises the president, told the Wall Street Journal.

Reuters said the escalation could be announced as soon as Wednesday.

The Chinese have already proposed buying more U.S. goods in order to settle the dispute, only to have the White House—which wants to win a broader argument about intellectual property and subsidies—reject the proposal. The two sides have not held high-level talks for a couple months now.

So what does the Chinese side think of the U.S.’s proposed escalation? Not a lot.

“If the U.S. takes measures to further escalate the situation, we will surely take countermeasures to uphold our legitimate rights and interests,” a Chinese foreign affairs ministry spokesman said Wednesday, according to Bloomberg, which first reported the proposed escalation.

China has already complained to the World Trade Organization about the 10% tariff plan.

The trade dispute is weighing heavily on the yuan, which fell further on Wednesday along with Chinese equities, despite the Chinese administration announcing a push to support economic growth.

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