WASHINGTON — The Trump administration escalated its fight with China on Wednesday, saying that President Trump is considering raising tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent, as trade talks between Washington and Beijing remain at a stalemate.
Senior administration officials said in a briefing with reporters that Mr. Trump has directed the United States trade representative to consider increasing tariffs on Chinese imports like fish, petroleum, chemicals, handbags and other goods to 25 percent. A final decision on the size and scope of the tariffs is not expected before September.
The effort to further punish China is being led by hard-line advisers to Mr. Trump, who see the measure as a way to force Beijing back to the negotiating table on trade. But that approach is once again creating fissures within Mr. Trump’s own team, with his Treasury secretary, Steven Mnuchin, adamantly opposed to ratcheting up the tariffs and Peter Navarro, a key trade adviser, advocating for the higher levies, according to people familiar with the discussions. Stephen K. Bannon, who left the White House in August, has also been counseling the president to pursue tougher levies, according to people familiar with his thinking.
The potential for a 25 percent tax is being fueled by deep frustration within the Trump administration over its unsuccessful attempts to press China to change its trade practices, as well as by a sharp decline in the value of China’s currency. Administration officials have also been concerned that China may be manipulating commodity prices to harm American farmers, and hurting American companies through regulatory practices, for example holding up shipments of agricultural products in customs until they rot.
Since formal talks between Beijing and Washington fell through in May, Mr. Trump has doubled down on his threats, saying he was prepared to impose tariffs on all Chinese imports. Beijing has promised to retaliate with its own measures, and both countries have already imposed tariffs on $34 billion worth of each others’ imports.
“China’s position is firm and clear: pressure and blackmail from the U.S. won’t work,” Geng Shuang, the foreign ministry’s spokesman, said at a briefing on Wednesday in Beijing in response to reports about the 25 percent tariffs. “If the U.S. takes a further and upgraded move, China would definitely retaliate to safeguard our legal rights.”
Mr. Trump privately told advisers this week that he was intent on staying the course on punishing China with additional tariffs. Mr. Mnuchin has been advising against such a move, preferring to try and engage with his Chinese counterparts to resolve their differences.
But his hand has been weakened by a recent and rapid depreciation in China’s currency, which helps to make Chinese goods cheaper in foreign markets and buoys exports. That has given hard-liners inside and outside the administration an opening to advocate even higher levies.
The Chinese currency fell to a 13-month low against the dollar this week. The move came partly because of market forces, but also because China has been allowing the heavily managed value of its currency, the renminbi, to slide in currency markets in recent weeks. Mr. Trump strongly warned China against further depreciation of its currency as part of a flurry of early-morning tweets nearly two weeks ago.
Scott Kennedy, a China expert at the Center for Strategic and International Studies, said that ratcheting up tariffs to 25 percent would put substantial pressure on Chinese leaders to devalue their currency even more, to help offset any further losses to exporters. “We can expect further depreciation and vigorous internal debates about a one-off devaluation,” Mr. Kennedy said.
The 25 percent tariffs on $200 billion worth of Chinese goods would come in addition to American levies on $34 billion worth of products that are already in place, and an additional $16 billion that are scheduled to go into effect soon. China has vowed to respond to any trade measures in kind, and it has already imposed its own tariffs on $34 billion worth of American soybeans, pork, electric vehicles and other goods.
The administration maintains that China has long violated international trade practices, including by stealing American intellectual property. It argues that past administrations have failed to sway China and that the United States must be prepared to take a tough stance in order to change its course.
Congress passed legislation on Wednesday that will strengthen national security-related checks on Chinese investment in the United States, a method that the administration says China has used to capture valuable American technology.
The Americans and the Chinese have been carrying out back-channel talks over how to proceed, but both sides still seem hesitant to express much enthusiasm for formal negotiations. At present, the discussion is mostly centered around whether more formal talks should resume.
Mr. Mnuchin spoke casually with the Chinese delegation at the Group of 20 last week and said that he had been in touch with Liu He, a high-ranking Chinese official charged with negotiating with the United States, to see if he was planning on coming to the meeting. However, China had decided not to send its most senior officials, so no bilateral discussion was held, Mr. Mnuchin said.
China has been looking for solutions that would end the trade spat without requiring the country to making policy concessions that might limit the country’s future economic growth, according to people familiar with Chinese economic policymaking, who where not authorized to speak publicly.
Mr. Geng said on Wednesday that China remains eager to find a resolution to the dispute. “China has always been suggesting to use dialogue to resolve trade issues — our efforts and our sincerity are clear to be seen by the international world,” he said. “At the same time, we have to emphasize, our dialogue must be based on mutual respect and equality, on rules, and on credibility. Unilateral threats and pressure will only lead in the opposite direction from what we wished.”
While raising tariffs is aimed at hurting China, it is also having an impact on American consumers and businesses that rely on products from China’s factories. Farmers, in particular, have complained that they are bearing the brunt of the trade war as China raises the price on imported soybeans and other agriculture products that it typically buys from farms.
“Increasing the size of the tariffs is merely increasing the harm that will be done,” said Matthew Shay, the president of the National Retail Federation. “Tariffs are an unacceptable gamble with the U.S. economy and the stakes continue to rise with no end in sight.”
Last week, the Trump administration announced it would offer farmers up to $12 billion in subsidies to help compensate them for losses incurred as a result of the trade measures. But to offer the same level of aid to other industries that have been affected by retaliation from abroad, the U.S. Chamber of Commerce estimated in an analysis that it would cost the administration an additional $27 billion.
A public hearing about the $200 billion list is scheduled for late August, when American companies and individuals will be able to tell the United States trade representative which products they think should be on or off the list.
Mark Landler contributed reporting from New York and Alan Rappeport from Washington.