Donald Trump with Xi Jinping in 2017.Photo: Alex Brandon (AP)
Donald Trump’s administration is planning to propose by early December tariffs on “all remaining Chinese imports” if an upcoming summit between the president and his Chinese counterpart Xi Jinping does not work out, Bloomberg reported on Monday, a move that if enacted would virtually guarantee pain for companies like Apple that have so far evaded Trump’s masochistic trade war.
According to the Bloomberg report, sources said that an additional $257 billion in tariffs (a preliminary number based on import figures from 2017) is being discussed—which would bring the total amount of new tariffs imposed this year to over half a trillion dollars, counting tariffs on $250 billion in imports already in effect:
An early-December announcement of a new product list would mean the effective date — after a 60-day public comment period — may coincide with China’s Lunar New Year holiday in early February. The list would apply to the imports from the Asian nation that aren’t already covered by previous rounds of tariffs — which may be $257 billion using last year’s import figures, according to two of the people.
U.S. officials are preparing for such a scenario in case a planned Trump-Xi meeting yields no progress on the sidelines of a Group of 20 summit in Buenos Aires in November, according to two of the people, who declined to be identified to discuss internal deliberations. They cautioned that final decisions had not been made.
As Bloomberg noted, at a press conference on Monday, White House press secretary Sarah Huckabee Sanders postured the summit as very big and important and presidential, whether or not it works out.
“I’m not going to get ahead of the conversation,” Sanders said. “You have two of the most powerful leaders in the world. I think that’s consequential no matter how you look at it and we’ll see what happens when they sit down.”
A source told Reuters that no decision has been made, but that “the wheels are turning” in the direction of more tariffs.
Earlier this year, news leaked that Apple CEO Tim Cook had received some sort of reassurance from the White House that iPhones would be exempted from the trade war. That’s been the case so far, and a number of other Apple products also escaped being sucked into the current rounds of tariffs. Amid all this, though, Trump did a 180 and tweeted that Apple could escape potential price increases by simply shifting its entire supply chain to the U.S., an unworkable solution that would result in price increases either way.
If Trump fails to reach an agreement with Xi, not only would there be new rounds of tariffs on all imports from China—including Apple gear assembled there but also products from numberless other companies—but prior tariffs on $200 billion in goods would rise from 10 percent to 25 percent on Jan. 1, 2018, Bloomberg added.
Though stock market indexes are not actually a good snapshot of the economy—as NPR’s Adam Davidson wrote in 2012, it “reflects investors’ own reactions, and often hysterical overreactions, as they progress through the turmoil” of the market—Trump is fixated on simplistic numbers that sound good. And by that measure, the news of potential future tariffs has not gone over so bigly. Business Insider wrote:
Following the Bloomberg report, US stock indexes slipped into the red for the first time on Monday. The Dow Jones industrial average was down 400 points, or 1.6%, as of 3:37 p.m. ET, which was nearly 700 points from its high-water mark for the day. Similarly, the tech-heavy Nasdaq was down 188 points, or just over 2.6%, and the S&P 500 was down 28 points, or 1.1%.
This probably isn’t going to end well for anyone, not that the fundamental stupidity of this wasn’t clear from the start. No worries, though: At a rally this weekend, Bloomberg noted, the president told attendees that “We always win.”
[Bloomberg]
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