US President Donald Trump said he does not want to continue raising taxes because it will hinder consumption.
"I don't want to raise taxes anymore, because at some point, it will stop people from buying. I may even want to lower them so that people can continue to spend," Mr. Trump told reporters at the White House on April 17.
Analysts say this is a signal that the US wants to end the retaliatory tariff war with China in the past few months. Since the beginning of his term, the US President has announced 3 additional import tariffs on China, with the reciprocal tariffs being raised twice in just a few days. Currently, the total import tax the US has imposed on China during Mr. Trump's term is 145% on all products and 245% on some items.
After each time Washington announced tariffs, Beijing launched a response policy, including imposing import tariffs at equivalent levels, tightening exports of many important metals, and putting US businesses on the list of unreliable entities or restricting exports.
For nearly two weeks, Americans have been stockpiling goods due to concerns about rising prices after Washington raised import tariffs on trading partners. Not only electronics and household appliances, but people are also stocking up on essential items. Consumer behavior tracking company Consumer Edge recorded a spike in sales of non-perishable items after April 2.
For example, canned vegetables increased by 23%, instant coffee by 20%, and ketchup by 16%. Meanwhile, according to Earnest Analytics, people's spending at Apple stores increased by 20% from April 2 to April 7 compared to the previous average. Other retailers such as Home Depot and Belk also recorded increases of 10% and 18%, respectively.
Mr. Trump also revealed that he is "talking to China" about import tariffs. The US president said Beijing has "reached out many times" and that talks have been taking place since he raised tariffs on all US goods to 145%. He believes the US "will make a very good deal with China".
Regarding the sale of TikTok's US business, Mr Trump said it would have to wait until the trade issue was resolved. "We have a plan for TikTok, but it depends on China. We will hold off on the sale until the trade issue is resolved," he said.
This week, a spokesperson for China's Ministry of Commerce said he "will not bother" with the "tariff numbers game". Analysts said this was a signal that China would not increase tariffs on the US. The ministry also said that if the US truly wanted to resolve the issue through negotiations, it should abandon its extreme pressure approach and engage in dialogue with China based on equality, respect, and mutual benefit.
Earlier, Dan Wang, director of China at Eurasia Group, pointed out that the profit margin for China's export industry is 30-40%. Therefore, higher tariffs will not make a difference.