The trade standoff continues — as do the global economic jitters.
China will impose $75 billion in retaliatory tariffs on US goods, escalating the bilateral trade standoff that’s continuing to rattle the world’s financial markets.
Beijing will add two rounds of tariffs — one on September 1, the other on December 15 — to match the Trump administration’s plan to add 10 percent tariffs on $300 billion in Chinese goods. China’s tariffs will range from 5 to 10 percent and include goods like soybeans and oil.
It doesn’t end there. China will also add a 25 percent tariff on cars and a 5 percent tariff on auto parts, starting December 15, according to the Washington Post.
President Trump responded to China’s announcement with a series of angry tweets. “We don’t need China and, frankly, would be far….better off without them,” he wrote.
He included a directive, too. “Our great 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 wrote.
It’s not clear, exactly, what Trump means or how he intends to enforce this, though bringing jobs back to the US has long been the stated (and elusive) goal of his protectionist trade policies.
Trump added that he’d be “responding to China’s Tariffs this afternoon.”
….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
— Donald J. Trump (@realDonaldTrump) August 23, 2019
China, of course, is pushing back against Trump’s own levies. The president in August announced 10 percent tariffs on $300 billion in Chinese products starting September 1, which, when combined with previous tariffs, effectively taxes nearly all Chinese goods.
Last week, however, Trump announced he was delaying tariffs on some consumer products — things like cellphones and sneakers — until December 15, likely an attempt to avoid a hit to consumer spending during the holidays. The US Trade Representative’s Office cited “health, safety, national security, and other factors” as the reason for the postponement.
That reprieve obviously did little to ease trade tensions, and China’s latest move is a reminder that Washington and Beijing are no closer to ending this economic brinksmanship or signing any sort of deal. China and the US are supposed to resume trade talks in September, but no date has been set yet.
Financial markets are worried about a possible US recession, and Trump’s aggressive trade protectionism is driving a lot of those fears. China is also experiencing an economic slowdown, and though tariffs aren’t the only reason, they’re certainly not helping.
The fallout from the US-China trade war isn’t limited to those two countries; the rest of the world is starting to get increasingly nervous as the world’s two biggest economies continue to go tit-for-tat.
Author: Jen Kirby