President Donald Trump said Sunday that tariffs on $200 billion of Chinese goods will increase to 25% on Friday, despite repeated claims by the administration in recent weeks that trade talks with Beijing were going well.
The tariff rate on those goods was originally set at 10%. Trump had initially threatened to increase the tariffs at the start of the year, but postponed that decision after China and the U.S. agreed to sit down for trade talks.
In addition, Trump threatened to impose 25% tariffs on an additional $325 billion of Chinese goods "shortly."
The president said that trade talks with China are continuing, but are moving too slowly as Beijing tries to re-negotiate.
The U.S. imports goods from China totaling $539.5 billion and the trade deficit stood at $419.2 billion in 2018, according to the Office of the U.S. Trade Representative. If Trump follows through with his threats, virtually all goods imported from China to the U.S. would face some sort of tariff.
On Friday, Vice President Mike Pence told CNBC that Trump remained hopeful that he could strike a deal with China.
The White House said Wednesday the latest round of talks had moved Beijing and Washington closer to an agreement. Press secretary Sarah Sanders said, "Discussions remain focused toward making substantial progress on important structural issues and re-balancing the U.S.-China trade relationship."
There had been multiple reports that China and U.S. were close to a trade deal, and an agreement could come as soon as Friday.
Major sticking points between the U.S. and China have been intellectual property theft and forced technology transfers. There has also been disagreement as to whether tariffs should be removed or remain in place as an enforcement mechanism.
The S&P 500 is up more than 17% this year, partly on optimism that a trade agreement with China is coming soon. Apple CEO Tim Cook, for example, said on the company's earnings call last week that improved dialogue on trade and Beijing's economic stimulus had improved consumer confidence in the country.
"We certainly feel a lot better than we did 90 days ago," Cook said.
"If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China," Cook told CNBC at the time. "It's clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy."
However, Apple's stock has rebounded amid White House optimism about a China trade deal. The company's shares are up 34% year to date.