President Donald Trump’s decision to elevate his trade war with China to new heights sets the stage for a more prolonged battle between the world’s two largest economies.
With a 10 percent tax on over 5,000 more products from China now taking effect next week, Trump changed the character of his campaign with Beijing in three ways, all of which suggest the dispute will not end soon.
Long Haul
The Trump administration is for the first time publicly planning for a trade spat that drags into 2019 and possibly beyond.
That means U.S. businesses and consumers may have to learn to live with higher import costs as a new normal rather than a temporary phenomenon.
Until now the president argued he was using tariffs as a tool to force U.S. trading partners to the negotiating table. Tariffs, the argument went, are all about securing a “better deal” for American businesses and workers on the global stage.
In announcing the latest levies on Monday, Trump hinted at that argument again, pointing to his “great respect and affection” for Xi Jinping, his Chinese counterpart, and raising the possibility of a negotiation.
But he also signaled that he was digging in for the long haul. The 10 percent tariff that takes hold on Sept. 24 will rise to 25 percent on the first day of 2019. Moreover, if Beijing retaliates, Trump vowed to impose duties on a further $267 billion in Chinese imports.
If the administration follows the same procedures and time-line it used so far those tariffs would at the earliest hit either late this year or early next year.
The tariffs also threaten to undermine the prospect of any further talks any time soon with Beijing.
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