WASHINGTON: The Trump administration may be about to slap tariffs of up to 25 percent on an additional $200 billion in Chinese goods, escalating a confrontation between the world’s two biggest economies and likely squeezing US companies that import everything from handbags to bicycle tires.


The administration could decide to begin taxing the imports — equal to nearly 40 percent of all the goods China sold the US last year — after a public comment period ends Thursday. The administration has already imposed tariffs on $50 billion in Chinese products, and Beijing has punched back with tariffs on $50 billion in American goods. These US goods include soybeans and beef — a direct shot at supporters of President Donald Trump in the US farm belt. China plans to tax an additional $60 billion in US products if the Trump administration expands its hit list by $200 billion.


Trump initiated the trade war to punish Beijing for what it says are China’s predatory tactics to try to supplant US technological supremacy. Those tactics, the Office of the US Trade Representative has alleged, include stealing trade secrets through computer hacking and forcing US companies to hand over technology in exchange for access to the Chinese market.

In the early rounds of the hostilities, the administration targeted Chinese industrial imports to try to spare American consumers from higher import costs. But if Trump adds the $200 billion in Chinese products to the target list, American consumers would likely feel the pinch directly. And China has vowed to hit $60 billion in US products in retaliation.


Many American companies that rely on targeted Chinese imports are bracing for the next round of tariffs to hit, with some wondering whether they can absorb the higher costs or instead will need to pass them along to their customers — or find alternatives suppliers outside China.


“An escalation of the tariff war could start to sever or disrupt supply chains, bringing about diminished production efficiency, higher costs and lost competitiveness — ultimately leading to a lower potential growth rate for both countries,” analysts at S&P Global Ratings wrote Wednesday.


They say a full-blown trade war by 2021 could shrink America’s annual economic output by an average of one-third of a percentage point and China’s by two-tenths of a percentage point from 2019 through 2021. The trade war could inflict further damage if it rattles financial markets, thereby hurting business confidence and potentially discouraging investment.