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Trump Signals Potential Tariff Reductions on Chinese Imports

Former President Donald Trump has indicated a willingness to lower tariffs on imports from China, a move that some economists argue could diminish U.S. leverage in ongoing trade discussions. This shift could allow China to benefit from prolonging negotiations.

On Tuesday, Trump revealed his intention to reduce the current tariffs, which are set at 145 percent on a broad range of Chinese goods. As reported by The Wall Street Journal, a senior White House official indicated that the new rates could range between 50 percent and 65 percent. There is also speculation about a tiered system, proposing a 35 percent tax on non-strategic imports while maintaining a 100 percent tariff on goods deemed critical to national interests.

However, Trump has refrained from providing concrete details, only stating that new tariffs would not approach the current 145 percent level. In an effort to project strength, he emphasized that China must take prompt action to secure a deal, cautioning that delays could lead to terms less favorable to Beijing.

“If they don’t make a deal, we’ll set the deal,” he stated.

Analysts, such as those quoted in the South China Morning Post, suggest that Trump’s urgency may betray a level of anxiety about the trade negotiations. Some experts believe that China is in a stronger position and could afford to wait for more advantageous terms.

Despite attempts to communicate with lower-level Chinese officials, Trump has yet to meet with President Xi Jinping, a pivotal step towards finalizing any agreement. While discussions have occurred, Trump indicated last week that a formal deal is not “imminent,” even after several meetings aimed at reopening dialogue.

On Wednesday, as analysts noted Trump’s apparent desperation for a swift agreement, Guo Jiakun, spokesperson for China’s foreign ministry, asserted that any resolution requires the U.S. to cease threats and coercive tactics. Alicia Garcia-Herrero, Asia-Pacific chief economist at Natixis, echoed this sentiment, stating that China stands to secure a more favorable deal in these circumstances.

“[Trump] needs a quick deal,” Garcia-Herrero commented. “China does not need to offer anything substantial right now, given the U.S. is so eager. With a minor adjustment in import levels from the U.S., China might find it beneficial to lower tariffs. The terms could end up being more favorable for China than those of 2019.”

Source
arstechnica.com