President Donald Trump on Friday increased tariffs against Chinese goods hours after Beijing announced new punitive taxes on $75 billion worth of US -made products.
The additional levies are set to roll out in two tranches.
But last Tuesday, he said he would hold off on adding penalties on about 60 percent of those goods until December 15. Starting October 1, $250 billion in Chinese products now being tariffed at 25 per cent would be hit with a 30 per cent tariff.
Trump bashed China in his 2016 campaign, complaining that the communist country had taken advantage of lax trade policies from previous USA administrations of both political parties. 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. "We don't need China and, frankly, would be far better off without them", he tweeted, adding: "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 U.S.". Amazon.com Inc, UPS and the U.S. Postal Services to search out and refuse all deliveries of the opioid fentanyl to the United States.
The Twitter storm Friday came as Federal Reserve officials gathered in Jackson Hole for the central bank's annual symposium.
Emily McCormick is a reporter for Yahoo Finance. "President Xi said this would stop - it didn't". Then, China announced retaliatory tariffs on $75 billion worth of American goods.
The latest salvo was in response to Trump's plans to impose 10 per cent tariffs on a final US$300 billion list of Chinese-made consumer goods on Sept 1 and Dec 15, including cell phones, toys, laptop computers and clothing.
After the news broke, Apple (NASDAQ: AAPL) stock on the Dow Jones Industrial Average was down 1.4% in premarket trading on August 23, and chipmakers Micron Technology (NASDAQ: MU) and Nvidia Corp.
In a tweet, Trump said he would be raising planned tariffs on $300 billion in Chinese goods from 10% to 15%.
China also will increase import duties on US-made autos and auto parts, the Finance Ministry announced. The stocks of all three companies fell as traders tried to understand what the implications for them were. "This is a great opportunity for the United States", Trump added.
Businesses also expressed concern, with a trade group that represents large retailers criticizing the White House. Some of the tariffs will go into effect on September 1, while the remaining tariffs will begin on December 15. "And we should be looking at these trade deals".
China insists Trump's punitive tariffs have to be lifted immediately, while Washington is pushing for some to stay to ensure Beijing carries out any promises it makes.
The United States, Europe, Japan and other trading partners say Beijing's development plans violate its market-opening commitments and are based on stealing or pressuring foreign companies to hand over technology.
On Thursday, top White House economic adviser Larry Kudlow said there was progress in a deputy-level US-China trade call this week.
The trade war between the us and China has been rattling financial markets, disrupting global trade and weakening prospects for worldwide economic growth.
The knock-on effects of the US-China trade dispute was a key reason behind the Fed's move to cut interest rates last month for the first time in more than a decade.
Together, Ford, BMW, Mercedes and others exported about 164,000 vehicles to China from the U.S.in 2018, according to the Center for Automotive Research, a think tank in Ann Arbor, Michigan.
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