Trump likely to raise tariffs on China in two steps, former official says
Japan and Europe would also be in the trade line of fire if ex-president reelected
WASHINGTON
-- Donald Trump will likely consider a two-step plan to sharply
increase duties on Chinese goods if he is elected president again in
November and may threaten Japan and Europe with higher tariffs to force
them to open up their markets more to American products.
Trump said in early February that he is weighing duties of more than 60% targeting China. He would likely employ two legal provisions that he used during his presidency: Section 301 of the Trade Act of 1974, which allows an administration to slap tariffs on countries seen as engaging in unfair trade practices, and Section 232 of the Trade Expansion Act, which permits it to impose trade restrictions on national security grounds.
"I will implement a bold series of reforms to completely eliminate dependence on China in all critical areas," Trump said in a campaign video laying out his trade platform.
The duties would likely target semiconductor devices and other electronics, steel and pharmaceuticals -- products for which Trump aims to gradually reduce imports from China to zero over four years.
"What they could do is just be more strategic in the way that they deploy Section 301, and increase tariffs on strategic goods, without increasing tariffs on nonstrategic items," said Clete Willems, a partner at Akin Gump who served as deputy assistant to the president for international economic affairs in the Trump administration.
The second piece of the plan is to revoke China's most-favored-nation trading status, under which the U.S. gives the country the same trade advantages as its other trading partners under World Trade Organization rules. Ending this would put China alongside such hostile nations as North Korea and Cuba.
The U.S. enacted legislation granting China most-favored-nation treatment in 2000, and removing it likely would also require legislative action. Russia's designation was suspended in 2022 in response to its invasion of Ukraine.
Reducing the trade deficit to nearly zero is among Trump's goals. Former U.S. Trade Representative Robert Lighthizer, who has been involved in drafting the former president's campaign pledges, said in August that "I think you need to raise tariffs to a level that will get you to balance trade."
Revoking China's most-favored-nation status would push up duties on toys, for example, to 70%, while leaving semiconductors untouched, according to Willems. But the ensuing tariff hikes on a wide range of daily necessities could have a major impact on the economy.
Beyond China, Trump has proposed "universal baseline tariffs" on most foreign products. He mentioned 10% as a possible rate last summer.
Some U.S. observers argue that the executive branch lacks the authority to impose across-the-board duties on imports from the rest of the world. Trump could threaten to impose tariff hikes that are within his powers until legislation is passed, as with the China tariffs.
Trump's administration previously used the threat of additional duties of up to 25% on auto imports to force Japan and other countries to the negotiating table. He could use similar tactics again if elected, given that his platform emphasizes protecting the U.S. auto industry.
The former president will also pressure other countries to lower their own tariffs to open their markets to American exports. He has proposed, and urged Congress to pass, legislation allowing the U.S. to raise its tariffs on particular goods to match higher tariffs imposed by a trading partner.
"Under the Trump Reciprocal Trade Act, other countries will have two choices: They will get rid of their tariffs on us, or they will pay us hundreds of billions of dollars, and the United States will make an absolute fortune," Trump said in a campaign video. He has argued that when tariffs are raised, the exporter should bear the cost.
American allies are also in the former president's crosshairs. Trump is planning punitive trade measures against the European Union if elected, Bloomberg reports.
"The U.S. still has a significant trade deficit with Japan. And that fact should concern Japanese government officials and businesses if Trump is elected again," said Eurasia Group's David Boling, who was deputy assistant U.S. trade representative for Japan in the Trump administration.