Just days after it became publicly known that U.S. Trade Representative (USTR) Robert Lighthizer was preparing to implement an exclusion request process for the third tranche of imported Chinese products valued at $200 billion and subject to a 10 percent tariff under Section 301 of the Trade Act of 1974 (see Trump and Trade Update of May 3, 2019), President Donald Trump on May 5, 2019, tweeted that those same tariffs would soon increase to 25 percent.
….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
As these tweets read, the president not only intends to raise the tariff level to 25 percent by Friday, May 10, 2019, but also is considering a 25 percent tariff on imports from China valued at $325 billion – essentially placing a tariff on all products imported from China into the United States.
While TrumpandTrade.com is not in the habit of posting updates based solely on the president’s tweets (nothing has been formally posted on the White House or USTR websites), we deemed this development to be newsworthy. It appears that no one else in the Trump administration was aware that such an announcement would be made on the eve of a scheduled Chinese trade delegation visit to Washington, D.C. this week to continue negotiations to end the “trade war”; and Lighthizer and Treasury Secretary Steven Mnuchin have reported that such discussions were close to concluding. It now remains to be seen whether Trump’s negotiating strategy of threatening to raise the tariff and implement further tariffs will exert more pressure on China and lead to a favorable conclusion of negotiations, or result in China retaliating.