Trump suggests 80% tariff on China

Comment comes ahead of talks in Switzerland

Doina Chiacu

REUTERS

President Donald Trump said on May 9 that an 80% tariff on Chinese goods “seems right,” making his first suggestion of a specific alternative to the 145% levies he has imposed on Chinese imports ahead of weekend talks to contain a trade war between the world’s two biggest economies.

Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet Chinese economic czar He Lifeng in Geneva for talks that could be the first step toward resolving a trade dispute that has already entangled global supply chains.

“China should open up its market to USA – would be so good for them!!! Closed markets don’t work anymore!!!” Trump wrote in an all-caps social media post. “80% tariff on China seems right. Up to Scott B.,” he added moments later.

China’s foreign ministry has decried what it calls abusive and bullying economic tactics, and said that China remains firmly opposed to what it calls an unsustainable approach to trade by the United States.

While Trump has indicated on several recent occasions that he expects the punitive tariff rates he has imposed on China to come down, he had not until now floated a potential figure for where they may end up.

Even though it is almost half the current rate, it remains extraordinarily high, and it was not clear how well it would be received by China amid what Bessent has already described as a trade embargo between the countries.

What level tariff rates settle at – and not just for China – has been a central focus for investors rattled by months of financial market volatility arising from the chaotic rollout of Trump’s aggressive trade policies. U.S. stocks, which have recouped a

significant chunk of their losses since mid-February’s record high, were little changed on May 9 following Trump’s social media post. The dollar was weaker against a basket of major trading partners’ currencies.

Since taking office in January, Trump has hiked the tariffs paid by U.S. importers for goods from China to 145%, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.

China hit back by imposing export curbs on some rare earth elements, vital for U.S. manufacturers of weapons and electronic consumer goods, and raising tariffs on U.S. goods to 125%. It also imposed extra levies on some products, including soybeans and liquefied natural gas.

The weekend talks in Geneva have been described by Trump administration officials as a step towards deescalating tensions with China. White House economic adviser Kevin Hassett, director of the National Economic Council, said the meeting seemed “very promising” to U.S. officials.

“We’re seeing extreme respect, treating both sides with respect,” Hassett said in an interview with CNBC. “We’re seeing collegiality and also sketches of positive developments.”

Trump’s push on tariffs is widely seen as elevating risks to the U.S. economy – with concerns that they will lift prices for American consumers and businesses and rekindle inflation while at the same time cutting into the demand that has so far propped up the job market.

Indeed, Trump is already facing dropping approval ratings over his handling of trade as Americans brace to pay more for clothes, electronics, toys and countless other goods that emerge from Chinese factories. China’s government is seeking to mitigate closures, bankruptcies and job losses at manufacturers that are struggling to find viable alternatives to the U.S. market.