Experts warn of tougher U.S. tariffs targeting nation

Tariffs: Trump's plan likely to result in higher prices in U.S.

As United States President Donald Trump eyes tougher tariff measures against China starting in April, businesses and global markets are bracing for escalated trade friction, according to experts.

Sourabh Gupta, a senior fellow at the Institute for China-America Studies in Washington, DC, said that Trump has commissioned "a lot of probes and reports" targeting China on various issues, including whether China lived up to its market purchase target, whether the U.S. should initiate more Section 301 investigations against China, and how he can expand the range of already banned Chinese-made hardware and software for connected vehicles.

All these reports are due around early April, Gupta said, adding that Trump will then start using them to impose a tariff here and get leverage there.

Trump's pending trade reviews, due by April 1, are likely to accuse China of breaching agreements or employing "nonmarket practices", setting the stage for escalated measures. "The reports will inevitably criticize China, giving Trump leverage," Gupta said.

However, negotiations during Trump's first term saw limited success, with U.S. demands for total compliance often derailing talks. "The Americans wanted 10 out of 10, not nine," Gupta said.

On Thursday, Trump signed an executive order announcing reciprocal tariffs on imports from other countries, imposing duties equivalent to the rates that trade partners levy on U.S. exports. In another executive order signed on Tuesday, Trump reinstated 25 percent duties on steel and aluminum imports, applicable globally but notably affecting top suppliers Canada, Mexico, Brazil, the Republic of Korea and Japan, which collectively account for 25 percent of U.S. steel imports.

In an earlier round of announcements, Trump came close to imposing sweeping tariffs on the U.S.' largest trade partners, Canada and Mexico, accusing the two nations of channeling drugs and migrants into the country. Following some concessions from the two countries, he opted to pause the measures for 30 days. In contrast, he has already imposed an additional 10 percent tariff on all imports from China.

Peter Harrell, a nonresident fellow at the Carnegie Endowment for International Peace and a former National Security Council official, said in a discussion hosted by the Center for Strategic and International Studies, a think tank based in Washington, DC, that tariffs could disrupt U.S. alliances.

"The key is whether Trump's team prioritizes deals over maximalist demands," he said, warning that Trump's policies risk global ripple effects.

Dean Baker, senior economist at the Center for Economic and Policy Research, said in an interview with CBS MoneyWatch, "If you put a tax on imported steel and aluminum, you will raise the price of everything that uses that — cars first and foremost."

Baker estimated that adding a 25 percent tariff on imported steel and aluminum could increase the cost of a car by $1,000 to $1,500.

In a statement regarding the Trump administration's plan to impose reciprocal tariffs on all trade partners, David French, executive vice-president of government relations at the National Retail Federation, said that Trump's scale of the undertaking is massive and would be extremely disruptive to U.S. supply chains.

"It will likely result in higher prices for hardworking American families and will erode household spending power," French added.

Gupta, from the Institute for China-America Studies, said that Trump's tariffs target China as part of a "broader supply chain" approach, despite Beijing's cooperation with both the Trump and Biden administrations on the fentanyl issue.

The tariffs on China are already high in some sectors — like semiconductors and electric vehicles, on which Biden imposed 100 percent tariffs — but generally between 10 and 25 percent. An additional 10 percent tariff is just the beginning, Gupta said.

China has responded with targeted tariffs on $18 billion worth of U.S. goods, focusing on sectors such as automobiles, agriculture and energy, which are critical to Trump's political base.

Gupta described China's countermeasures as smart and restrained. "The measures are very restrained, affecting about 10 percent of U.S. trade. China has been preparing for this moment and is keeping ammunition for future rounds."

Gupta said he foresees "more bad news", because with climate cooperation "completely off the radar", potential collaboration may instead focus on geopolitical issues such as brokering Russia-Ukraine peace talks or engaging with the Democratic People's Republic of Korea.

"Trump prefers stability in strategic competition. That's where common ground might exist," he added.