Administration officials have been saying for several says that they felt they might be closing in on a trade deal with the Chinese, one of the main policy initiatives of the Trump administration.
President Donald Trump said Sunday that tariffs on $200 billion of Chinese goods will increase to 25% on Friday, despite repeated claims by the administration in recent weeks that trade talks with Beijing were going well.
The tariff rate on those goods was originally set at 10%. Trump had initially threatened to increase the tariffs at the start of the year, but postponed that decision after China and the U.S. agreed to sit down for trade talks.
In addition, Trump threatened to impose 25% tariffs on an additional $325 billion of Chinese goods “shortly.”
The president said that trade talks with China are continuing, but are moving too slowly as Beijing tries to re-negotiate.
Major sticking points between the U.S. and China have been intellectual property theft and forced technology transfers. There has also been disagreement as to whether tariffs should be removed or remain in place as an enforcement mechanism.
I get the sense that a trade deal may be close, but Trump is having problems getting the Chinese to budge on certain key items, probably the forced technology transfers and the intellectual property theft. So he’s throwing out this threat to try to get some movement from the Chinese.
If a trade deal is signed, that’s going to be an even bigger shot in the arm for the economy. I’ll hold out hope for 4% GDP growth or higher!