Just in case you were worried that the days after the Labor Day market holiday might be boring, well, worry no more. Sources in the White House are saying that President Donald Trump plans to move on tariffs on an additional $200 billion in Chinese imports quickly after the public comment period ends on September 6. It’s uncertain at this point whether “quickly” means immediately on September 7 or with a delay of a couple of weeks after a September 7 announcement. Also uncertain is whether the administration would impose the tariffs all at once or in tranches. Asked to confirm the plan in an interview with Bloomberg on Thursday, President Trump said it was “not totally wrong.” He also repeated his criticism of China for devaluing the yuan.
The Trump administration is putting together a final list of imports to target with tariff rates of 10% to 25%.
At the moment China tariff hawks such as U.S. Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro are driving policy with the two arguing for quick action as they see China’s government as temporarily vulnerable to U.S. pressure because of signs of slowing economic growth in the country. Lighthizer and Navarro also believe that progress on a trade deal with Mexico (and possibly Canada) puts additional pressure on China to negotiate. Right now trade talks between the two countries are at a standstill.
The Shanghai Composite Index was down 0.46% in overnight trading.
In related trade news President Trump rejected a proposal from the European Union to eliminate tariffs on auto imports and reiterated his threat to pull out of the World Trade Organization. An index that tracks the automobile and car-parts sector in Europe fell as much as 1.7% percent on Friday morning, according to Bloomberg. The President called the offer “Not good enough.”
