President Donald Trump is expected to impose a staggering 104% tariff on all Chinese imports on Wednesday (9), White House press secretary Karoline Leavitt announced Tuesday (8). This is in addition to Chinese tariffs that were in place before Trump's second term.
China's tariffs were already scheduled to increase by 34% on Wednesday as part of Trump's "reciprocal" tariff package.
But the president added another 50% after Beijing failed to back down on its promise to impose retaliatory tariffs of 34% on U.S. goods by midday Tuesday, adding another 84% in taxes.
Earlier on Tuesday, China's Commerce Ministry said it "firmly opposes" the additional 50% tariffs on Chinese imports, calling them "a mistake on top of a mistake."
The ministry has vowed to step up its retaliation on US exports.
U.S. stocks, which had rallied early Tuesday, began to slide after Leavitt's comments. By 3 p.m. ET, the Dow, Nasdaq and S&P 500 were all in negative territory.
“Countries like China that have chosen to retaliate and try to double down on their mistreatment of American workers are making a mistake,” Leavitt told reporters on Tuesday.
“President Trump has a backbone of steel, and he will not break.”
“The Chinese want to make a deal, they just don’t know how to do it,” he added. She declined to say what terms, if any, Trump would consider for reducing tariffs on China.
Trump initially imposed a 10% tariff on all Chinese goods in February, with no exceptions, tying it to the country's alleged role in aiding illegal immigration and fentanyl into the United States. Last month, he doubled those tariffs.
China was the second-largest source of U.S. imports last year, sending a total of $439 billion worth of goods to the U.S., while the U.S. exported $144 billion worth of goods to China.
Mutual tariffs threaten to harm domestic industries and are likely to result in layoffs.
When Trump’s first term ended, the U.S. levied an average tariff of 19.3% on Chinese goods, according to an analysis by the Peterson Institute for International Economics. The Biden administration has kept most of Trump’s tariffs in place and added new ones, bringing the average rate to 20.8%.
On Wednesday, the total average tariff on Chinese exports to the US will rise to nearly 125%.
While previous rounds of Chinese tariffs have prompted more American companies to look to other foreign countries, such as Mexico and Vietnam, to manufacture products, China has remained the top foreign source for several items.
This includes, but is not limited to, toys, communications equipment such as smartphones, computers, and a wide range of other consumer electronics products. All of these products are likely to cost American consumers significantly more in the near future.
Dozens of countries are also expected to see higher tariffs soon
Dozens of other countries, as well as the European Union, also face a midnight deadline for new tariff rates. Those rates, which Trump set last week, range from 11% to 50%.
Leavitt told reporters that despite several talks with world leaders aimed at negotiating lower tariffs, Trump has little appetite to delay his plans.
After speaking with Trump on Tuesday, Leavitt said, “He expects these tariffs to go into effect.”
At the same time, she said Trump has instructed his trade team to make “tailor-made” deals with countries that want to negotiate.$BTC
