President Trump today escalated his threats to punish China for its trade policies, warning anew that he is prepared to impose tariffs on all Chinese imports and arguing that Beijing has manipulated its currency at the expense of the United States.

In a taped interview with the business channel CNBC, Trump warning, “I’m willing to go to 500,” meaning he is prepared ultimately to impose tariffs on $500 billion in Chinese imports — roughly the value of all the goods Beijing shipped to the United States last year. President Trump has already imposed tariffs on $34 billion in Chinese goods, and Beijing has retaliated with tariffs on an equal amount of American exports.

The president’s remarks to CNBC caught financial markets by surprise today. U.S. stocks sank in early trading before rebounding. Global markets have remained generally calm in recent weeks and months despite the eruption of a full-blown U.S.-China trade war and a host of other conflicts between the United States and key trading partners, including Canada and the European Union. “I’ve been surprised that up until now, markets seem overly sanguine about the risks” of a trade war between the world’s two biggest economies,” said David Dollar, senior fellow at the Brookings Institution’s China studies center and a former official at the World Bank and U.S. Treasury Department.

The tariffs the Trump administration has already imposed on $34 billion in Chinese imports are the outgrowth of a dispute over the predatory practices it says China has deployed to try to supplant America’s global supremacy in high technology. Those Chinese practices include cyber-theft and an insistence that American and other foreign companies hand over technology in exchange for access to the Chinese market.

Beijing’s retaliatory tariffs have hit American soybeans and pork. The two countries have also targeted an additional $16 billion of each other’s goods for an expected second round of tariffs. And last week, the administration announced plans for yet more tariffs on $200 billion worth of additional Chinese imports. In response, Beijing vowed “firm and forceful measures.” Beijing is targeting, in particular, sectors like American agriculture.

With trade tensions rising, so is the pushback from American business that fear potentially devastating consequences, not only from China but also from Europe, Canada and other countries in Asia.

Trump has ordered the Commerce Department to investigate whether auto imports pose a threat to U.S. national security that would justify tariffs or other trade restrictions. Earlier this year, he invoked national security as a justification for taxing imported steel and aluminum.

Auto tariffs would sharply escalate global trade tensions: The U.S. last year imported $192 billion in vehicles and $143 billion in auto parts, figures that dwarf last year’s $29 billion in steel and $23 billion in aluminum imports.

 

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