President Donald Trump is sending signals that the U.S. may impose more tariffs on China as he heads to the G-20 meeting in Argentina this week. That has analysts, companies and consumers paying close attention to just how much, where and when the new levies may kick in.
Mr. Trump is set to meet with his Chinese counterpart, Xi Jinping, on Friday and Saturday during the summit in Buenos Aires, which involves finance ministers and other top officials from 20 of the world’s largest economies. A key item on the agenda is expected to be the incipient trade war between the U.S. and China.
The president has already imposed 10 percent tariffs on $200 billion of Chinese goods this September, and they’re set to rise to 25 percent on Jan. 1. Mr. Trump said this week he’s willing to raise tariffs on every good coming into the U.S. from China. “If we don’t make a deal, then I’m going to put the $267 billion additional on” Chinese goods at rates of 10 percent or 25 percent, Mr. Trump said in an interview this week with The Wall Street Journal.
On Tuesday, Larry Kudlow, director of the president’s National Economic Council, echoed his boss’s sentiments, saying the administration is “extremely disappointed” in discussions so far with China, another signal that an agreement isn’t likely.
“This could be a calculated tactic to continue pressuring China with escalation to raise the stakes for negotiations, but the President has yet to back down on his announced plans in the dispute,” said Ed Mills, an analyst with Raymond James, in a note to clients.
Consumers may want to buy before prices rise
Previously enacted tariffs are already seeping into prices for consumer products sold in the U.S. — from handbags to food to bicycles — as the G-20 summit begins. But even more goods are likely to feel the pain, if Mr. Trump does escalate his tariffs.
Among those potentially affected would be Apple products imported from China, including iPhones and laptops, according to a transcript of the interview with The Wall Street Journal’s Bob Davis.
Companies reporting third-quarter results in the past month have discussed raising prices come January, especially if the higher tariffs are imposed as threatened. Consumers are likely to feel a bigger pinch in 2019. Walmart already warned of pricier products because of tariffs on Chinese imports.
Tech companies don’t expect a reprieve
Silicon Valley in particular seems to be bracing for more tariffs.
“Imposing a new round of tariffs would cause a shock that will reverberate across America and the globe. It would further threaten global supply chains, leading to higher prices for the electronic devices people rely on every day and even the loss of American jobs,” Jose Castenada, a spokesman the Information Technology Industry Council, a tech trade group, said in an emailed statement.
“It is deeply disappointing the president wants to undermine his opportunity to create meaningful progress before the discussions even begin,” he wrote.
Potential auto tariffs also loom
The Trump administration has threatened to slap heavy tariffs on imported cars and auto parts. Some experts fear that could cost hundreds of thousands of American jobs and raise U.S. auto prices by roughly 10 percent. Such taxes could not only hurt consumers but also stifle niche areas like car-collecting and restoring classic cars.
The EU and U.S. suspended potential auto tariffs in a truce announced over the summer, but that deal may not hold much longer, some observers predict. And in the renegotiated North American Free Trade Agreement, now called the U.S.-Mexico-Canada Agreement, countries drew up what’s called a side-letter on autos to address the issue separately.
The U.S. Trade Representative “has been teeing up protection (probably export restraints) for over a year, as shown by the side letters exchanged in the USMCA process,” Mary Lovely of the Peterson Institute for International Economics told CBS MoneyWatch in an e-mail.
Negotiating tool
The plant closings and layoffs announced by General Motors this week are putting another spotlight on the issue of tariffs. GM’s move came after rival automaker Ford said steel tariffs imposed this spring already have cost it $1 billion.
Mr. Trump noted the possible auto tariffs as a negotiating tool with the EU in The Wall Street Journal interview. European Commission President Jean-Claude Juncker “knows where I stand,” Mr. Trump said, according to the transcript. “He didn’t care until I said I was going to tax his cars. And then the next day he was there at about 7:00 in the morning.”
Asked by the paper if he’d go ahead and impose the auto tariffs, Mr. Trump said, “If they don’t make a fair deal with us, I’d do it in about 12 minutes.”
— The Associated Press contributed to this report
