President Donald Trump revealed in an interview aired Friday that he is “ready” to put tariffs on every Chinese good coming into the U.S. if necessary.
“I’m ready to go to 500,” Trump told CNBC’s Joe Kernen in a “Squawk Box” interview. “I’m not doing this for politics, I’m doing this to do the right thing for our country. We have been ripped off by China for a long time.”
He stressed that while he bears no ill will toward China or its leadership, he is determined to address China’s unfair trading practices.
The president was referring to the roughly $500 billion worth of Chinese products exported to the U.S. each year. Were he to take such an action, it would dramatically escalate the slowly intensifying trade spat between Washington and Beijing.
As is, the U.S. has already imposed tariffs on foreign-made steel and aluminum, as well as hundreds of Chinese products worth an estimated $34 billion annually. The latter set of tariffs, which could be expanded to target anywhere from $200 billion to $500 billion worth of Chinese goods, are intended as punishment for China’s unfair trade practices and long history of economic aggression against the U.S., specifically the theft of American intellectual property.
China has responded to active tariffs with reciprocal trade penalties on American products, in many cases impacting the president’s political base. (RELATED: Leaked Document Reveals How China Sees The Trade War And, More Importantly, How It Plans To Fight It)
The U.S. is confident it has the uppherhand in the ongoing fight, as China’s position as the surplus trader is a weakness in a trade war focused on tariffs. (RELATED: White House: ‘China Has A Lot More To Lose’ In A Trade War)
“China has more to lose. They have a choice to make,” White House trade adviser Peter Navarro stressed in June, adding, “The numbers speak for themselves. Do the math.”
While China exports over $500 billion worth of goods to the U.S. each year, annual U.S. exports to China are only worth about $130 billion. The U.S. has more targets.
Perceiving the trade war as “a war against China’s rise, to see who has the greater stamina,” Beijing might choose to turn to non-tariff measures as the conflict escalates.
For instance, China could decide to create procedural and regulatory roadblocks for U.S. products entering the country, limit access for American businesses, disrupt the domestic operations of U.S. companies, throttle deals and acquisitions, manipulate its currency or even boycott American products. Beijing could also turn to the weaponization of U.S. treasury holdings or an embargo on American goods.
The U.S. could return fire with non-tariff actions, most likely inflicting greater damage on China than the latter could on the U.S. in the long run, according to experts. But, both sides would incur losses in a full-scale trade war.
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