Trade War Heats Up Again As China Sets Tariffs On $75 Billion In U.S. Goods, Autos< < Back to
Updated at 11:49 a.m. ET
President Trump promised to respond Friday after China said it will slap tariffs on $75 billion autos and other U.S. goods. And he “ordered” U.S. companies to stop doing business with China.
U.S. stock markets fell sharply after Trump’s tweets on China. The Dow Jones Industrial Average was down more than 400 points. Both the Dow and the S&P were down about 1.7% in late morning trading.
Friday’s announcement by China marks an escalation in a trade war that has rippled through the world economy and raised fears of a U.S. recession.
The first batch of tariffs will go into effect Sept. 1, and a second, on autos and auto parts, is due to go into effect Dec. 15. The tariffs range from 5% to 25%.
Trump tweeted that he “will be responding to China’s Tariffs this afternoon.”
“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” Trump said, referring to the Federal Reserve Chairman, whom he’s been urging to cut interest rates, and China’s leader.
Trump said the United States has lost “stupidly” trillions of dollars to China over the years, citing the theft intellectual property. “We don’t need China and, frankly, would be far better off without them,” he said.
Trump said U.S. firms doing business with China should look elsewhere.
“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 said.
China’s finance ministry called the new tariffs “a forced move to deal with U.S. unilateralism and trade protectionism.”
Earlier this month, the Trump administration postponed until Dec. 15 new 10% tariffs on some imports from China that were due to take effect Sept. 1. They were part of a new set of tariffs on $300 billion worth of goods that triggered a sharp selloff in the U.S. stock market.
President Trump said the delay was intended to ease the effect on U.S. consumers during the holiday shopping season.
Last September, China set tariffs on $60 billion in U.S. goods in retaliation for U.S. duties.
The $75 billion in goods affected by China’s latest tariffs would represent more than 60% of the $120.3 billion worth of U.S. goods exported to China last year.
U.S. and Chinese negotiators are due to meet in September for a new round of trade talks but have not yet confirmed a date.
This developing story will be updated. NPR’s Emily Feng contributed to this report.