The white house in Washington DC
Trump raises another 5% duty on Chinese goods
Aug 27.08.2019, 5 - WASHINGTON / BEIJING - U.S. President Donald Trump hit back on a new round of Chinese tariffs on Friday, adding an additional 550% tariff to around $ XNUMX billion in targeted Chinese goods in the pair's recent escalation of the trade war largest economies in the world.
Trump's move, announced on Twitter, came hours after China unveiled retaliatory tariffs on US goods worth $ 75 billion, prompting the president earlier in the day to urge US companies to pull their activities out of China.
The deepening trade war between the US and China fueled fears that the global economy could slide into recession and US stocks into a tailspin, with the Nasdaq Composite .IXIC down 3% and the S&P 500.SPX down 2,6 % decreased.
US Treasury yields also fell as investors sought safe deposits, and crude oil, which was targeted for the first time by Chinese tariffs, fell sharply.
Trump's tariff response was announced after the markets closed on Friday, potentially causing more damage for the next week.
"Unfortunately, past governments have allowed China to be so far ahead of fair and equitable trade that it has become a huge burden for American taxpayers," Trump said on Twitter. "As President, I can no longer allow this to happen!"
He said that the United States would increase its existing tariffs on Chinese imports worth 250 billion to 30%, from the current 25% from 1. October, the 70. Anniversary of the founding of the Communist People's Republic of China.
At the same time, Trump announced an increase in planned tariffs on remaining Chinese goods worth 300 billion to 15% of 10%. The United States will begin to apply these duties to some products from the 1. However, tariffs on about half of these goods were up to the 15. December postponed.
The US Trade Representative's Office confirmed the validity dates, but said that it would conduct a public comment period before issuing the 30% duty on the 1. October enforced.
US business groups reacted angrily to the new tariff increase.
“It is impossible for companies to plan for the future in such an environment. The government approach is clearly not working, and the answer is no longer taxes for American businesses and consumers. Where is this going, ”said David French, senior vice president of the National Retail Federation.
Trump will meet this weekend at a summit in France with heads of state and government of the major G7 economies where trade tensions will be among the hottest topics of discussion.
ABRUPT REACTION
The President's announcement, following a meeting of the Oval Office with its advisers, fits in with a pattern of rapid retaliation as the trade dispute with China began more than a year ago.
“He decided he wanted to answer. He was given a few different options on things to do and in the end that was what he decided, "said a senior house clerk.
"He doesn't take this lightly, but he's in a good mood and looking forward to the G7."
Another person familiar with the matter said officials had to rotate to come up with options after Trump caught them with tweets promising an afternoon response.
Since taking office in 2017, Trump has called on China to make major changes to its economic policies to end theft and forced transfers of US intellectual property, curb industrial subsidies, open its markets to American companies, and increase purchases of US goods.
China denies Trump's allegations of unfair trading practices and has resisted concessions to Washington.
“We don't need China and, to be honest, we would be much better off without it. The huge sums of money that China has earned and stolen from the United States, year after year, for decades, will and must stop, ”Trump tweeted on Friday morning.
"Our large American companies are hereby directed to immediately seek an alternative to China, including the ability to chase your businesses home and manufacture your products in the United States."
It is unclear which law enforcement agency Trump could use to force U.S. companies to shut down operations in China or stop sourcing products from the country. Experts said he could invoke the International Emergency Economic Powers Act, which has been used in the past for sanctions against Iran and North Korea, or exclude offensive companies from federal procurement contracts ...
The US Chamber of Commerce rejected Trump's appeal and urged “continued, constructive engagement”.
“Time is of the essence. We do not want US-China relations to deteriorate further, ”Myron Brilliant, executive vice president and head of international affairs for the group, said in a statement.
Trump also said he was admonishing logistics companies including FedEx (FDX.N), Amazon.com Inc (AMZN.O), UPS (UPS.N) and the US Postal Service to seek and deliver all supplies of the opiate Fentanyl to the United States rejected.
The Chinese Ministry of Commerce said it was on 1. and 15. September will raise additional duties of 5% or 10% on total 5.078 goods from the United States and will reintroduce the 25% tariffs on cars and 5% on car parts that were suspended last December, as the trade talks between the US and do not develop China.
It was unclear whether a new round of talks planned for September would take place.
China Daily, an official English-language newspaper often used by Beijing to get its message across to the rest of the world, said China's tariff list was the result of "careful calculations."
"With the US going at full throttle with its customs policy, China has no choice but to strike back to protect its core national and economic interests," it said in an editorial on Saturday.
"China has taken the countermeasures so that US decision makers will wake up, smell the roast and understand that there can be no deal until Washington follows the Osaka consensus."
AGRICULTURE, AUTOMOBILE INDUSTRY AFFECTED
The growing economic impact of the trade dispute has been a major reason for the US Federal Reserve's move to cut rates last month for the first time in more than a decade.
"The president's trade war threatens to drive the economy into a ditch," said Mark Zandi, chief economist at Moody's Analytics. "The president hopes the Federal Reserve will save him, but if he continues the war, the Fed won't be up to the task."
US goods, which were affected by Beijing's recent tariffs, included soybeans from 1. September will be burdened with an extra inch of 5%. China will be starting from the 15. Also, US beef and pork will be labeled with an additional 10% duty and ethanol with an additional 10% duty.
Although the Trump administration has introduced aid to farmers hit by Chinese tariffs, frustration is growing in the American agricultural belt, a major political constituency for Trump, when it enters its re-election campaign 2020.
“The view from much of the farmland is bleak and the anger is boiling over. With bankruptcies and defaults rising and prices falling, frustration over the lack of progress towards an agreement grows, "the bipartisan Farmers for Free Trade Group said in a statement.
Reporting by Judy Hua, Min Zhang, Se Young Lee, Stella Qiu, Hallie Gu and Dominique Patton in BEIJING, Yilei Sun and Winni Zhou in SHANGHAI, David Lawder, David Shepardson, Doina Chiacu, Jeff Mason, Steve Holland in WASHINGTON and Koh Gui Qing in New York; Additional coverage by Jason Lange, Andrea Shalal and Humeyra Pamuk in WASHINGTON and Tom Polansek and Julie Ingwersen in Chicago; Letter from Paul Simao; Editing by Alison Williams, Howard Goller and Sonya Hepinstall, Reuters Washington Translation and editing: Institute for Rare Earths and Metals
