CNN
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President Donald Trump warned Tuesday that even higher tariffs could be imposed as soon as next week: this time, China was his target, as Trump threatened to unleash a wave of higher taxes on imports from the second largest trading partner of the United States.
At an Oval Office news conference that echoed similar off-the-cuff remarks Monday, Trump said he planned to impose across-the-board 10 percent tariffs on all Chinese goods starting Feb. 1. % on Mexico and Canada, but were diverted to China, noting that former President Joe Biden left in place significant tariffs that Trump imposed during his first administration.
It’s unclear what prompted such a rapid change in Trump’s tariff policy, even though he had promised tariffs of up to 60% on all goods imported from China during his campaign. Trump said Tuesday that too much fentanyl was coming into the United States from China via Mexico and Canada and that the threat of tariffs could prompt China to crack down on the deadly drug.
“I also had this conversation with President Xi the other day about China. I said, we don’t want this bullshit in our country. We have to stop this,” Trump said. “We’re talking about a 10% tariff on China, based on the fact that they’re sending fentanyl to Mexico and Canada.”
Trump on Tuesday reiterated a common refrain that during his first term he struck a deal with Xi in which China agreed to impose the death penalty on drug traffickers caught smuggling drugs into the states. -United, but he said Biden had not followed through on the proposal. . Trump has not explicitly asked China to execute convicted drug traffickers as a condition of avoiding tariffs.
On Monday, Trump issued an executive action ordering the secretaries of Commerce, Treasury and the U.S. Trade Representative to investigate the causes of America’s trade deficits with foreign countries, to determine how to create a “service external revenue” to collect customs duties. identify unfair trade practices and review existing trade agreements for potential improvements. It also calls for a review of the U.S.-Mexico-Canada Trade Agreement (USMCA) signed by Trump during his first term and asks agencies to assess whether a tougher U.S. trade policy could succeed to restrict the flow of fentanyl and the flow of undocumented migrants into the country. the United States.
But the action did not specifically call for an increase in tariffs. As a candidate, Trump proposed sweeping, across-the-board tariffs: up to 20 percent on imports from all countries, with a 25 percent tax on goods from Mexico and Canada, plus 60% customs duties on goods from China. He also pledged to use tariffs as a negotiating tool with other countries, notably Denmark, thereby pressuring the European nation to cede control of Greenland to the United States. (He also did not rule out the possibility of using the army to take Greenland.)
The delay made investors happy on Tuesday, sending the Dow up more than 500 points. Wall Street is generally opposed to tariffs because U.S. importers pay tariffs at ports, passing those costs on to businesses and consumers. They may be inflationary – a particularly worrying notion considering that America is still feeling the effects of the inflationary crisis of recent years.
Various factions of Trump’s economic team worked to decide how best to impose the tariffs.
Market-minded officials like Scott Bessent, Trump’s pick for Treasury secretary, and Kevin Hassett, his pick to lead the National Economic Council, have advocated a softer approach. Tariff advocates such as Peter Navarro, a White House trade adviser, and Howard Lutnick, Trump’s pick to lead the Commerce Department, have argued that it must go all the way to send the message Trump wants.
Trump called on his allies on Capitol Hill to step up their support for the tariffs. Even though the concrete policy has not yet been decided, Trump could put his thumb on the scale with these impromptu announcements.
CNN’s Kayla Tausche contributed to this report.
