Chinese and American flags fly near the Bund before the US trade delegation meets their Chinese counterparts for talks in Shanghai, China, July 30, 2019.
Aly song | Reuters
BEIJING – President-elect Donald Trump plans to raise tariffs by another 10% on all Chinese goods entering the U.S., according to a post Monday on his social media platform Truth Social.
The post immediately followed one in which Trump said his first of “many” executive orders on Jan. 20 would impose 25% tariffs on all products from Mexico and Canada. Such a step would put an end to a regional free trade agreement.
Trump will be inaugurated as the next US president on January 20. He cited illegal immigration and illegal drug trafficking as reasons for the tariffs.
“I have had many conversations with China about the massive amounts of drugs, particularly Fentanyl, being sent into the United States – but to no avail,” Trump said. He claimed that, contrary to promises, Beijing has not imposed the death penalty on such drug dealers.
Fentanyl, a synthetic opioid, is an addictive drug that causes tens of thousands of overdose deaths annually in the U.S.
Curbing the illicit supply of the drug, whose precursors are mainly produced in China and Mexico, is an area where Washington and Beijing have agreed to cooperate.
“Drugs are flowing into our country, especially through Mexico, at levels never seen before,” Trump said. “Until they stop, we will charge China an additional 10% tariff, above and beyond any additional tariffs, on all of their many products entering the United States of America.”
Trump had threatened 60% tariffs on Chinese goods during his presidential campaign.
A 10% tariff on China is lower than the 20% to 30% that markets had expected, Kinger Lau, chief China equity strategist at Goldman Sachs, said Tuesday on CNBC’s “Squawk Box Asia.” He expects China will cut interest rates, increase fiscal stimulus and moderately depreciate its currency to counter the economic impact of higher tariffs.
Mexico is the largest trading partner from the US, followed by Canada and China, according to US data from September.
According to Chinese customs data, the US is China’s largest trading partner by country. The Asian country’s largest regional trading partners are the Association of Southeast Asian Nations and the European Union.
— CNBC’s Hui Jie Lim contributed to this report.