Trump will raise tariffs on China in response to trade war retaliation


President Donald Trump listens to a question from the news media as he sits behind the Resolute Desk in the Oval Office of the White House in Washington, July 26, 2019.

Leah Millis | Reuters

President Donald Trump will hike tariff rates on most imports from China in response to the latest shots in the trade war between the world’s two largest economies, he said Friday. 

The White House will raise existing duties on $250 billion in Chinese products to 30% from 25% on Oct. 1, the president tweeted. The tariffs on another $300 billion in Chinese goods set to take effect Sept. 1 will now be 15% instead of 10%, he added. 

In a series of tweets, the president said he would increase the pressure on Beijing as part of his long held goal to force China to change what he calls unfair trade practices. Trump has fired more shots in the trade war as he seeks a sweeping trade deal with Beijing — even as the tariffs threaten global economic growth. 

“Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,” he tweeted Friday. “As President, I can no longer allow this to happen!”

Trump’s tweets about China earlier Friday helped to send major U.S. stock indexes spiraling more than 2% for the day. China announced new tariffs on $75 billion in U.S. goods on Friday morning in retaliation to U.S. duties on $300 billion in Chinese products. 

Earlier Friday, Trump tweeted that American companies “are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” He did not immediately detail the authority he thought he could use to compel firms to leave the country that sends more goods to the U.S. than any other. 

Trump’s tweet, a detonation in the trade war between the world’s two largest economies, sent major U.S. stock indexes tumbling. Even before Trump raised the prospect of U.S. companies leaving China, investors had worried about sagging global economic growth and trade conflicts. 

Following the tweet, Trump met with his trade policy team at the White House on Friday. 

Earlier in the day, Federal Reserve Chairman Jerome Powell boosted markets by saying the central bank would take the steps necessary to sustain economic growth. He said the U.S. economy is in good shape despite trade concerns dragging on the global economy. 

Trump responded by questioning whether Powell or Chinese President Xi Jinping is the “bigger enemy” to the United States. 

This story is developing. Please check back for updates. 

Subscribe to CNBC on YouTube.


Source link