Trump Threatens to Increase China Tariffs to 25%, Add $325B More to List

President Trump announced yesterday that the U.S. will increase tariffs to 25 percent on $200 billion in Chinese imports, effective Friday. The tariff rate was originally 10 percent, but during trade talks at the end of 2018, Trump promised that the number could increase if the sides couldn't reach a deal by March 1. That deadline was extended once, but with the sides still unable to come to terms, it appears the long-threatened 25 percent rate will now go into effect.

In a series of tweets on Sunday, Trump also threatened to place 25 percent tariffs on an additional $325 billion in Chinese goods.

....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!

— Donald J. Trump (@realDonaldTrump) May 5, 2019

Trump hasn't shied away from incendiary language when it comes to the ongoing trade dispute with China. He had formerly threatened to tax every single item from China to the U.S., so continuing with that tactic through the uncertain trade talks isn't surprising. The decision to increase tariffs to 25 percent also seemed like an inevitability that was only temporarily prolonged by a previous agreement.

Last week, however, Vice President Pence told CNBC that Trump was optimistic about striking a deal with China, and White House Press Secretary Sarah Huckabee Sanders said after the latest round of trade talks on Wednesday that the two parties are inching closer to an agreement.

"Discussions remain focused toward making substantial progress on important structural issues and re-balancing the U.S.-China trade relationship," she said.

White House Chief of Staff Mick Mulvaney said last week that the U.S. should know "one way or the other in the next couple weeks" about how the trade talks, which have escalated to an all-out trade war, will pan out.

The current hypothesis is that the Trump administration could make some concessions on things, like removing a 10 percent duty on a portion of the tariffed goods, but keep the 25 percent tariff on another $50 billion in goods until after the 2020 election, according to Politico.

While the reports coming from the White House say that things are coming to a neat end and that both parties will get something close to what they were looking to achieve, the latest news paints a picture of a more uncertain and unstable process between two economic powerhouses.

The theme of uncertainty has been prominent in the ongoing trade talks, and until there is ink on paper formalizing an agreement, it looks to stay that way.