<p>President Trump had threatened to impose a 10% import tax on $200 billion in Chinese imports. Now, he is considering increasing that figure to 25%.</p>
<p>The proposal is backed by Administration advisers who say the increase is necessary to make up for the recent depreciation of the Chinese yuan, which has dropped 6% against the USD since May 30th. ;</p>
<p>&ldquo;Once you go down the road of using tariffs to disrupt the Chinese, you have to say 25% compared to 10%,&rdquo; says China expert Derek Scissors.</p>
<p>Trump has already imposed a 25% tariff on $34 billion worth of Chinese goods, and a similar tariff will go into effect for $16 billion Chinese goods in the coming days. Late last month, Trump said he was &ldquo;ready&rdquo; to tax all $500 billion worth of Chinese imports.</p>
<p>A higher tariff on the $200 billion would need to be announced before public hearings on the proposal ;begin on August 20th. ;</p>
<p>The $200 billion list of goods, which includes tilapia, lighting products, and printed circuit boards, is expected to have a much bigger impact on consumers than the previous rounds of tariffs. ;</p>
<p>&ldquo;Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods,&rdquo; says Erin Ennis of the US-China Business Council. &ldquo;The cost increases will be passed on to customers, so it will affect most Americans&rsquo; pocketbooks.&rdquo;</p>
<p>The proposed increase follows a failure from Washington to make any real progress in settling the trade dispute with China and in forcing Beijing to abandon practices which facilitate the illegal transfer of intellectual property. ;</p>
<p>Treasury Sec. Steven Mnuchin and Chinese envoy Liu He have discussed a future meeting, but talks remain in the preliminary stage. Trump has already vetoed Mr. Liu&rsquo;s proposal to buy $70 million of US farm, energy, and other products. ;</p>
<p>Another factor here is Trump&#8217;s recent deal with the European Union, which could substantially weaken China&#8217;s future negotiating position.</p>
<p>The United States and the EU &#8220;agreed to use the World Trade Organization to deal with intellectual property theft, government pressure on companies to transfer technology, and the operation of state-owned industries &#8211; all code words for alleged trade infractions by Beijing,&rdquo; reports <em>The Wall Street Journal. ;</em></p>
<p>China is also ;struggling with economic troubles including corporate defaults and weakening investment, which could limit its promised retaliation against the US on trade. ;</p>
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