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Markets swing as President Trump digs in on China tariffs

Published: Thursday, May 09, 2019 @ 1:05 PM

Ahead of a round of last ditch trade negotiations between U.S. and Chinese trade negotiators, President Donald Trump said on Thursday that he would have absolutely no qualms about imposing higher tariffs on $200 billion of imported goods from China, blaming Beijing for undermining efforts to secure a new trade deal.

"We were getting very close to a deal and then they started to renegotiate the deal," President Trump told reporters at the White House. "We can't have that."

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With Chinese negotiators on their way to Washington for trade talks, President Trump said he would increase tariffs on $200 billion in Chinese goods on Friday, increasing the duties from 10 percent to 25 percent.

"Our alternative is an excellent one," Mr. Trump said, predicting the tariffs would bring in billions of dollars to the U.S. Treasury.

Asked if there would be a deal, the President simply said, "We'll see. We'll see."

The President's tough line on a trade deal with China came amid another up and down day on Wall Street, as markets have been spooked this week by the possibility of higher tariffs being levied on imports from China.

The Down Jones had been down several hundred points, but cut its losses during the President's remarks to less than 200, as he mentioned that he had received a letter from the Chinese leader.

In Congress, the reaction to the President's tough talk on trade with China - and the possibility of an escalating trade war - does not fit neatly along partisan lines.

Some Democrats have praised the White House for being tough with China, while some Republicans have openly expressed concern about retaliatory actions by Beijing, which could especially hurt U.S. farmers.

As he took questions from reporters on Thursday, the President again stated - incorrectly - that Chinese companies would pay the tariffs; those tariffs would be paid by companies in America which are purchasing the goods, as critics call them a tax.

"These tariffs are taxes that Americans, NOT CHINA, pay!!" said the group Tariffs Hurt the Heartland. 

"The consequences of this decision will be dire - lost jobs, cost increases, & market turmoil," the group tweeted.

But for Mr. Trump, that answer is weak tea when it comes to the U.S. trade imbalance with China.

"As President of our great country, I've got to do something  about it," he said.

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