U.S. to Impose Higher Tariffs on Chinese Exports

US President Donald Trump speaks after touring the Lima Army Tank Plant at Joint Systems Manufacturing in Lima Ohio

Earlier, a Chinese official in Beijing said that China's top trade envoy is preparing to travel to Washington for crucial talks, despite Trump threatening to impose more punishing taxes on United States dollars 200 billion worth of Chinese products, citing slow progress in negotiations. A February study published by the Trade Partnership estimated that slapping 25 percent tariffs on all remaining non-tariff Chinese imports-which is exactly what Trump threatened to do on Sunday-would cost more than 2.1 million American jobs, reduce the size of the US economy by more than 1 percent, and cost the average family of four about $2,200. American businesses, while largely supportive of Trump's crackdown on China's trade practices, are eager for the tariffs to be lifted, not increased and expanded.

The Wall Street Journal reported that Beijing was considering pulling out of negotiations.

The sell-off may reflect fears Trump could also increase the pressure on the European Union in trade talks. China's commerce ministry did not immediately respond to a request for comment. "He's the tough guy, this is part of the Art of the Deal script", adding that he may impose the higher tariffs for 24 hours but will convene a presser that would lead to a trade deal.

President Trump announced the US and China are nearing a mutually beneficial trade agreement amid efforts to speed-up negotiations. China retaliated by levying tariffs amounting to some $110 billion on U.S. goods.

That has disrupted trade in goods from soybeans to medical equipment.

Trump imposed duties of 25 per cent on an initial US$50 billion of Chinese goods previous year and then 10 per cent on an additional $200 billion in products in September.

Trump's move is a reversal of his decision in February not to increase tariffs from 10 per cent to 25 per cent on $200 billion of goods, thanks to progress in the trade talks.

Chinese indexes plunged. The Shanghai Composite index closed 5.6% lower and Hong Kong's Hang Seng index sank 2.9%.

In early trading, market benchmarks in France and Germany fell 2 percent.

The Dow Jones Industrial Average tanked more than 400 points early in Monday's session, but has since recovered some of its losses.

Trump Announces New Tariffs On China And They're YUGE
Trump repeated a threat to raise the rate on existing tariffs and tax almost all of China's exports to the United States. It now has imposed 10% tariffs on $200 billion in Chinese imports and 25% tariffs on another $50 billion.

By potentially scotching the trip, Beijing would be following up on its pledge to avoid negotiating under threat, it said. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate, " the president continued.

"Investors will remain bearish on the yuan, as they reprice in trade war risks because the new developments are a reversal of previous positive progress", Ken Cheung, senior foreign-exchange strategist at Mizuho Bank. Trump was apparently tweeting out of frustration over Chinese resistance to some of his bigger demands; he succeeded in rattling US investors, at least.

Economists suggested Trump may want to step up pressure because China's economy is improving, reducing the urgency for Beijing to strike a deal.

"China shouldn't negotiate with a gun pointed to its head", an unnamed Chinese person was quoted as saying in the report.

One White House source, according to the media, said the Trump administration was sick of hearing "empty promises", from China's team spearheaded by President Xi Jinping's confidante Liu He, who is also a Vice-Premier.

What did Mr Trump say?

.

"We'll see what happens over the next couple of weeks, but we're getting close to a very historic monumental deal and if it doesn't happen we'll be fine too, maybe even better", he stated.

A man in Beijing walks past a US fashion apparel store with a bench shaped like a bomb with a USA flag.

Trump's trade negotiators weren't particularly surprised by his tweets, the people said.

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