US slaps 10 per cent tariff on extra $US300bn of Chinese goods

The US will hit an additional $US300bn of Chinese goods with a 10pc tariff after talks failed to yield results.

Donald Trump accused China of reneging on trade promises. Picture: AP.

President Trump said that the US would impose 10pc tariffs on an additional $US300 billion ($440bn) in Chinese goods and products beginning on Sept. 1, after trade talks this week failed to yield any significant results.

In a series of tweets, Mr Trump, who received a briefing from his trade team Thursday, said that negotiators still planned to resume their discussions, as scheduled next month, and expressed his interest in reaching “a comprehensive Trade Deal” with China.

However, he said that China’s promise to increase its purchase of US agricultural products, as well as its promise to stop the sale of fentanyl to the US have fallen short.

“China agreed to … buy agricultural products from the US in large quantities, but did not do so,” he said. “Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States — this never happened, and many Americans continue to die.”

Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to...

— Donald J. Trump (@realDonaldTrump) August 1, 2019

...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and...

— Donald J. Trump (@realDonaldTrump) August 1, 2019

Unlike previous rounds of tariffs, which have focused largely on industrial goods, the $US300bn tranche is set to include a host of consumer products, from electronics and cellphones to apparel.

The tariffs would include Apple‘s iPhones unless such phones are granted an exemption or otherwise excluded from the final list. Mr Trump said in July that Chinese-made parts for Apple’s Mac pro computers won’t get exemptions.

The tariffs would also affect practically all the groups of products not hit previously, with the exception of select categories, such as medicines.

Stocks, bond yields and oil prices dropped following Mr Trump’s announcement. The Dow Jones Industrial Average erased a rebound of more than 300 points, oil dropped 6 per cent and the yield on the benchmark 10-year US Treasury note plumbed fresh 2019 lows. The blue-chip index dropped 60 points, or 0.2 per cent, to 26800. The S&P 500 fell 0.4 per cent and the technology-heavy Nasdaq Composite slid 0.4 per cent.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met this week with Chinese Vice Premier Liu He in Shanghai after a monthslong freeze in trade discussions.

Apart from small steps, however, expectations were low for making significant progress in resolving a trade dispute that has rattled global markets and seen both sides slap punitive tariffs on about half the more than $US600bn in goods they trade.

Speaking to the Fox Business Network earlier Thursday, Mr Trump’s China trade adviser Peter Navarro indicated that the president sees an economic benefit to tariffs.

“Tariffs are good. Tariffs are raising revenues,” he said. “They’re helping defend our steel and aluminum industries. They’re helping us get China to the negotiating — do you think China would be at the negotiating table right now?”

The Wall St Journal