An off-hand comment made Sept. 7 by President Donald Trump could portend a deepening of the so-called “trade war” with China.
On Friday morning, while onboard Air Force One flying to Fargo, ND to campaign for a Republican senatorial candidate at a fundraising rally, Trump chatted with members of a press gaggle.
“Now, we’ve added another $200 billion [in tariffs against China]. And I hate to say this, but, behind that, there’s another $267 billion ready to go on short notice, if I want.” — President Trump
During the informal on-the-record conversation, he was asked about the China tariffs. According to the White House transcript of the conversation, Trump said they were “going really well.” He additionally referenced the $200 billion in potential tariffs on Chinese imports of mostly food and consumer items, saying they were “in the hopper.”
Trump said the implementation of the $200 billion in tariffs is “up to China,” suggesting that implementation will depend on Chinese behavior on trade-related issues. That round of potential tariffs was announced on July 10, and the comment period regarding them closed on Sept. 6, the day before Trump’s comments.
There has been no information on when the $200 billion in tariffs might go into effect. China has repeatedly answered U.S. tariffs with in-kind tariffs of their own but has stated they will not act first. In the past, implementation of U.S. tariffs against China result in implementation of Chinese tariffs against the U.S.
Later in the Air Force One press gaggle conversation, Trump revealed that there might be more tariffs to come.
“[W]e’ve taxed them $50 billion—that’s on technology. Now, we’ve added another $200 billion. And I hate to say this, but, behind that, there’s another $267 billion ready to go on short notice, if I want. That totally changes the equation.”
According to Bloomberg and other financial news outlets, this additional $267 billion—together with the previous implemented and threatened tariffs against China—would more than cover the value of U.S. imports of Chinese goods.
The overall markets reacted poorly to the comments, with the S&P 500 losing almost 13 points (roughly 0.35 percent) in the hour following the earliest reports of Trump’s statement. Similarly, the NASDAQ lost 47 points (about 0.7 percent) and the Dow Jones Industrial Average lost 131 points (about 0.5 percent) in that first hour.
All of those indexes recovered later in the day and have since gained past where they were prior to the reports of Trump’s comments.
There were no official statements, either from the White House, the president, nor the Office of the U.S. Trade Representative, regarding additional $267 billion in tariffs against China as of press time. However, Trump has discussed the potential of trade tariffs in casual settings a few weeks before official action is taken in the past. — WLJ
