Trump announces new retaliatory tariffs on China

Marco Green
August 24, 2019

US President Donald Trump has escalated the ongoing trade war with China, threatening to increase tariffs by another five per cent.

In a tweet, Trump said he would be raising planned tariffs on $300 billion in Chinese goods from 10% to 15%.

The latest salvos in the US-China trade war sent global financial markets tumbling.

In New York, the Dow Jones industrial average was down 623.34 points at 25,628.90, the third large fall in as many weeks. The German DAX lost more 1% but London's FTSE gained ground.

When he virtually ordered USA companies to "immediately start looking for an alternative to China", it inspired further market panic.

General Motors Co previous year sold more than 3.64 million vehicles in China, accounting for more than 43 per cent of unit sales globally. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won't let that happen!

Even before he announced an increase Friday, J.P. Morgan had estimated that Trump's tariffs would cost the average household roughly $1,000 a year if he proceeded with his threats.

Carmakers would be risking significant sales if they abandoned China.

China will put an extra 5% tariff on American soybeans and crude-oil imports starting next month.

The US president does not have the authority to unilaterally decide American companies' place of operation and his tweet confounded US companies and analysts.

Trump has said China pays the tariffs he has imposed on Chinese goods, but tariffs are paid by US-registered firms when the products enter the United States.

President Donald Trump says products coming from China that were to be hit with a 10% tariff on September 1 will now face a 15% levy.

Those tariffs, imposed on items like electronics and clothing, were expected to be introduced at the beginning of September but some have been delayed until mid-December to avoid hitting US Christmas shoppers.

He also heaped blame on Federal Reserve Chairman Jerome Powell, questioning whether he or Chinese President Xi Jinping "is our bigger enemy" while calling for the Fed to lower interest rates and pursue a policy of injecting cash into the US economy.

At a symposium of central bankers in Jackson Hole, Wyoming, on Friday Powell warned that trade tensions were hitting the global economy.

Trump slammed the Chinese move on Twitter and criticized United States companies operating in China.

Officials, including U.S. Trade Representative Robert Lighthizer and adviser Peter Navarro discussed potential retaliatory options.

He said that talks between the two countries were on schedule and argued that the tariffs were not hurting Americans. "Consumers aren't feeling the pain [of the trade war] and we are focused on making sure they [China] feel the pain, not us".

United States bond markets have recently sent warning signals of an impending recession. That's 3.8 per cent below the record high reached in April but up 12 per cent so far this year.

He also took aim at the Fed over what he has called its failure to lower interest rates to boost the economy and keep the dollar from becoming too strong, which weighs on exports.

Noting that the U.S. business community had, for many years, highlighted the lack of progress in addressing China's "unfair trade practices", he said the Chamber had invested efforts in resolving these challenges through negotiation and encouraging tough action by the government.

Other reports by Click Lancashire

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