President Donald Trump now says he's willing to slap tariffs on all imports from China.
"We are being taken advantage of and I don't like it," the president said in a taped interview that aired today. Trump told CNBC's Joe Kernen he was "ready to go to 500," referring to the roughly $500 billion of Chinese imports brought to the United States in 2017.
Trump has already imposed a 25 percent import tax on about $34 billion worth of Chinese tariffs. A second round of 10 percent tariffs on $200 billion of Chinese products will be the subject of administrative hearings next month.
Trump's comments follow on the heels of White House trade adviser Peter Navarro downplaying the harm Trump's tariffs have done to American businesses. Navarro told CNBC yesterday that the trade barriers are "much less disruptive than these headlines would suggest."
From motorcycles to washing machines, prices of a range of products are climbing thanks to the taxes Trump has imposed on goods coming from China. And to what end? In his interview, President Trump railed against the "deficits" that we have with our trading partners. But trade deficits mean almost nothing. They simply mean that Americans trade more money for Chinese goods than vice versa, largely because Chinese goods are cheaper, which in turn affords Americans a higher standard of living.
Beyond that, America's trade deficit with China is balanced by a huge capital investment surplus with China. In other words, we buy more goods from China, but China takes those dollars and re-invests them into our economy.
China is America's biggest trading partner. Can Congress afford to stand by while the president increases import taxes by hundreds of billions of dollars, all on the basis of a flawed understanding of global trade? Sen. Jeff Flake (R-Ariz.) has already called on congress to nullify Trump's steel tariffs; and we can only hope that more of his colleagues will join his effort before the situation becomes more dire.