United States President Donald Trump on Friday hit back at the Chinese government with a 5% increase of tariffs on imports from the country and asked American companies to consider an alternative place of business, Associated Press reported. This came a day after Beijing imposed tariffs on $75 billion worth of American goods and resumed duties on cars and auto parts originating from the United States.
Trump also blamed Chairman of the United States Federal Reserve Jerome Powell for the condition of the country’s economy, asking who was the “bigger enemy” of the United States – “Jay Powell or Chairman Xi [Jinping]”. “Our Country has lost, stupidly, Trillions of Dollars with China over many years,” the president tweeted. “They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, and they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them.”
The latest development in the trade war between Beijing and Washington sent the markets into a tizzy with the Dow Jones Industrial Average losing more than 620 points or 2.4% while London’s Financial Times Stock Exchange and the German DAX also turned negative, according to BBC.
Trump claimed that previous administrations had allowed China to get ahead of “fair and balanced trade”, which had become a burden for American taxpayers. “In the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship. China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!),” he said before announcing an increase in tariffs on Chinese goods and products.
Planned tariffs on Chinese products worth $300 billion would be increased from 10% to 15% while existing tariffs on another $250 billion of Chinese imports would be increased to 30% from the current 25% from October 1, Trump said. “With each percentage point added to the tariff hikes, it becomes more and more difficult for importers not to pass the costs on to the US consumer,” Associated Press quoted Wendy Cutler, a former United States trade negotiator as saying. “And this is not to mention the uncertainty that these increases contribute to the overall business environment.”
Chief Executive Officer of Florida-based toy company Basic Fun! which imports from China said that Trump’s demand that American companies leave the country was outrageous. He said it was unprecedented for the president to ask this of private businesses “when national security was not involved.”
Trump had earlier this month pledged to impose 10% tariffs on $300 billion of Chinese imports from September 1. The two countries have been engaged in a trade war for the last one-and-a-half years.
Last week, United States President Donald Trump had said that India and China were no longer “developing nations” and cannot continue taking advantage of the tag from the World Trade Organization.
Now, follow and debate the day’s most significant stories on Scroll Exchange.