US President Donald Trump’s tariffs on China are unlikely to ease, despite ongoing talks towards a comprehensive deal targeted for November, according to two people familiar with the matter.
The US seems “very comfortable” with the current rate of tariffs, the sources said, adding that the recent negotiations have mostly revolved around “broader” issues like TikTok, subsidies, trade deficit and export controls since the Trump administration remains focused on collecting revenues to fix the American fiscal deficit.
“President Trump is very comfortable with the current level of tariff ... and Chinese imports is a big chunk” of the revenue source, one person familiar said. Another person noted that the US side was “happy” with the current tariff level.
Trump signalled as much in a social media post on Wednesday, saying that the US has “made so much money on tariffs” that his administration is “going to take a small portion of that money and help our farmers”.
To the US’ dismay, China has significantly reduced its purchase of American agricultural products this year. China has not bought any US soybeans since April, largely moving its orders to Brazil and Argentina.
The “America-first” president accused Beijing of not buying for “negotiating reasons only”, adding that in his much-anticipated meeting with President Xi Jinping “in four weeks”, soybeans will be a “major topic of discussion”, referring to the bilateral talk set to take place on the sidelines of the Asia-Pacific Economic Cooperation in South Korea later this month.
Trump imposed 20 per cent fentanyl-related tariffs on Chinese imports in February. He later added another 34 per cent “reciprocal” levies.
After Beijing retaliated with its own tariffs on some American imports, the trade war escalated to about 145 per cent on the US side and 125 per cent on the Chinese side.
A truce was agreed to after multiple rounds of negotiations starting in May in Geneva, and later in London, Stockholm and Madrid. In August, the truce was extended by Trump until November 10. However, the average US tariff on Chinese imports still hovers around 55 per cent.
The Chinese side has been pushing the US to remove 20 per cent fentanyl tariffs, but the Trump administration has refused to budge on the issue.
However, Beijing has approved exports of some rare earth materials from American companies, and Washington has approved the sale of some low-end semiconductors to Chinese firms.
Remarks on Tuesday by US Trade Representative Jamieson Greer, who has been involved in trade negotiations with China, appear to confirm the assessment that the current tariff rate may prevail for the foreseeable future.
He told a gathering in New York that tariffs on Chinese imports of around 55 per cent are a “good status quo”.
“If you ask the president, ‘Do we have a deal with China?’ he would say, ‘Yeah, this is our deal. I’ve got 55 per cent tariffs on it. That’s the deal.’ So that is a good status quo,” Greer said.
However, he added that “I would like to get to a position with them where ... we can trade, and we can trade a little more freely and in a little more transparent kind of way.”
Last month, US Treasury Secretary Scott Bessent said that the Chinese side had sought US tariff reductions in exchange for ceding ownership control of TikTok to a US-based consortium, but it was rejected by Trump’s trade team.
TikTok, a Chinese social media app, was banned by the previous administration of President Joe Biden, but Trump had pledged to keep it alive. The two sides were able to reach a US$14 billion deal after having a phone conversation with Xi last month.
However, Chinese sources say that Beijing has not yet approved the sale of its algorithm licence to the consortium of US companies, including the American tech giant Oracle.
A person familiar with the talks said that it was unlikely that a comprehensive trade deal would be agreed upon before the Apec gathering, and that if all issues are not resolved, there could be another extension to the truce.
Another person familiar noted that the meeting between Xi and Trump could help guide negotiators on both sides in prioritising some unresolved issues.
The phone call between Xi and Trump held last month was their second this year. Both leaders framed the nearly two-hour-long conversation in positive terms, with Trump calling it “very productive” and Beijing describing it as “pragmatic, positive and constructive”. -- SOUTH CHINA MORNING POST
