President Donald Trump has decided to scale back the previously reported 25 percent tariffs on $200 billion in Chinese goods, adding a 10 percent levy instead, two people briefed on the decision said.

An announcement on the move, still one of the most severe economic restrictions ever imposed by a U.S. president, is expected to come within days, the people said, speaking on the condition of anonymity because they weren’t authorized to discuss internal plans.

The new tariffs would apply to more than 1,000 products, including smartphones, televisions, toys, and a range of other products. These penalties could drive up the cost of a range of products ahead of the crucial holiday shopping season, though it’s unclear how much.

Trump has ordered aides to set the tariffs at 10 percent across a range of consumer products. These tariffs are paid by U.S. companies that import the products, though they often pass the costs along to U.S. consumers in the form of higher prices.

The U.S. imports roughly $500 billion in Chinese goods each year. Combined with existing tariffs, these new penalties would cover half of all goods sent to the U.S. from China each year.

A White House spokesman didn’t immediately respond to a request Saturday afternoon for comment on the change to Trump’s initial plan for tariffs at 25 percent.

On Friday, White House spokesman Lindsay Walters said “the president has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the longstanding concerns raised by the United States.”

Trump has signaled that he believes only the threat of real economic pain will coerce Beijing into major changes. He has recently said that he believes China’s economy is suffering because of his approach.

Trump has accused China of a number of unfair trade practices, and he has threatened to impose tariffs on all Chinese imports if changes aren’t made. He wants China to buy more American products, open up to more U.S. investment, and stop stealing U.S. intellectual property, among other things.

Trump’s top advisers have been united in his effort to push China to change its economic practices, but they have been split on his tactics. Some have advocated a more cautious, diplomatic approach with Chinese leader Xi Jinping. Treasury Secretary Steven Mnuchin was planning to restart talks with Chinese leaders soon, but China has vowed to retaliate against any escalation of the trade battle between the two countries.

The decision on the tariffs was first reported Saturday by the Wall Street Journal.

Trump has tried to use tariffs as a way to penalize a number of countries this year, including Mexico, Japan, Canada, and members of the European Union, hoping that the threat of driving up costs on their products will make them more open to his demands. This tactic has had mixed success.

Trump first imposed tariffs on roughly $50 billion in Chinese products, and the list of products mostly included industrial equipment so as not to directly affect consumers.

China responded by imposing tariffs on U.S. products like beef and soybeans, a response that scared the U.S. agriculture industry and angered Trump and other White House officials. Trump responded this summer by ordering his advisers to come up with a list of $200 billion in other Chinese products to penalize, a package of products that includes many consumer products.

And two weeks ago he said he is preparing a third package of penalties on what he said would be $267 billion in additional items, a list that likely encompasses all remaining goods produced in China.

“For the near term, this combination of tactics seems to signal that unless and until China comes to the table with significant actions on the issues the U.S. is hammering, the U.S. will keep tariff pressure going,” said Claire Reade, a former U.S. trade negotiator. “Talks without action won’t do the trick. The open question, of course, is how much action is enough and can China find a way to move that will be seen as being in its own interest, not kowtowing to the U.S.”

The U.S. ran a $233.5 billion deficit in goods trade with China during the first seven months of the year, an 8 percent increase compared with the same period in 2017.

Corporate executives increasingly believe the trade dispute can only be resolved by direct talks between Trump and Xi. The two leaders may see each other at the United Nations General Assembly in New York later this month and are scheduled to meet on the sidelines of the G-20 summit in Buenos Aires in November.

A Section on 09/16/2018



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