November 26, 2018 / 9:59 PM / 18 days ago

UPDATE 4-Trump says he expects to raise China tariffs -Wall Street Journal

(Adds comments from Chinese vice minister of science and technology)

WASHINGTON/BEIJING, Nov 27 (Reuters) - U.S. President Donald Trump said on Monday he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent and repeated his threat to slap tariffs on all remaining imports from China.

In an interview with the Wall Street Journal four days ahead of his high-stakes meeting with Chinese President Xi Jinping in Argentina, Trump said it was “highly unlikely” he would accept China’s request to hold off on the increase, which is due to take effect on Jan. 1.

“The only deal would be China has to open up their country to competition from the United States,” Trump told the Journal. “As far as other countries are concerned, that’s up to them.”

Trump, who is due to meet Xi on the sidelines of a G20 summit in Buenos Aires this week, said that if negotiations were unsuccessful, he would also put tariffs on the rest of Chinese imports.

“If we don’t make a deal, then I’m going to put the $267 billion additional on,” at a tariff rate of either 10 percent or 25 percent, Trump told the Journal.

A Chinese official told reporters last week that the two leaders would look to set guidelines for future talks.

“The main issue is how to settle down the trade war,” the official said on condition of anonymity due to the sensitive nature of preparatory negotiations. “I am conservatively optimistic that can be done,” he added.

At a regular news briefing in Beijing on Tuesday, Chinese foreign ministry spokesman Geng Shuang reiterated China’s hope that both sides could work towards a “positive outcome” from the meeting between the two leaders, citing a “consensus” they reached during a Nov. 1 telephone call.

DOUBLED-EDGED SWORD

Last week, Washington proposed stepping up scrutiny over technology exports in 14 key high-tech areas including artificial intelligence and microprocessor technology, a move many analysts believe was directly aimed at China.

“If the United States does not buy Chinese products and U.S. technology is not forthcoming, would that really benefit U.S. companies?” said Xu Nanping, China’s vice minister of Science and technology.

“We can buy from Japan and South Korea or develop our own. What would the United States do?” Xu told a small group of reporters in Beijing on Tuesday, adding that China accounts for at least half of the market for many U.S. listed companies.

Technology controls would also be a double-edged sword, so in the long term it would not be a win-win situation, but a lose-lose one, Xu said.

“In the manufacturing chain, China occupies the low end and middle section, while the United States is on the middle to high end. Once the chain is broken, the United States would be affected too.”

TECH GOODS

Trump said the next round of tariffs could also be placed on laptops and Apple Inc’s iPhones imported from China, which are part of that $267 billion list of goods not yet hit by tariffs.

Cell phones and computers, among China’s biggest exports to the United States, have been spared as the administration has sought to minimize the impact on U.S. consumers. The Journal said the administration has been worried about a consumer reaction to such levies.

“Maybe. Maybe. Depends on what the rate is,” Trump said, referring to the possibility of tariffs on mobile phones and laptops, according to the Journal. “I mean, I can make it 10 percent, and people could stand that very easily.”

Shares in Apple fell in after-hours trading after the interview was published. An Apple spokesman did not immediately respond to Reuters’ queries.

Apple CEO Tim Cook has personally pressed the issue of tariffs with Trump, telling the president that while there are valid concerns about U.S.-China trade relations, tariffs are not the best way to resolve them.

Despite using contract manufacturers to make most of its products overseas, Apple has also sought to emphasize its contribution to the U.S. economy, saying it plans to spend about $55 billion in 2018 with its U.S.-based suppliers.

Additional reporting by Philip Wen, Ryan Woo and Yawen Chen in BEIJING Reporting by Eric Beech Editing by Peter Cooney, Lisa Shumaker & Shri Navaratnam

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