This archive report was first published on 24 August 2019.
Trump Escalates Trade War with China ¶
President Trump has taken a bold step in the ongoing trade war with China, announcing that he will raise existing tariffs on Chinese goods to 30% and impose new tariffs on an additional $300 billion worth of Chinese imports.
On August 23, 2019, Trump tweeted that he would increase tariffs on $250 billion worth of Chinese goods to 30% from 25% on October 1, and tax another $300 billion worth of Chinese imports at a 15% rate, rather than the 10% he had initially planned. Those levies go into effect on September 1.
“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!)” Trump said on Twitter. “Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%.”
Trump's decision comes after China said it would retaliate against his next round of tariffs by raising taxes on American goods. The higher rates will only aggravate the financial pain from the trade war, which is already raising prices for businesses and consumers across the globe.
Even before the new 30 percent rate, Trump's existing tariffs were expected to cost the average American household more than $800 a year, according to research by the Federal Reserve Bank of New York. And Trump's next $300 billion tranche will affect consumer products like toys, smartphones, and clothing.
“It's impossible for businesses to plan for the future in this type of environment” said David French, the senior vice president for government affairs at the National Retail Federation. “The administration's approach clearly isn't working, and the answer isn't more taxes on American businesses and consumers. Where does this end?”
Trump's tariff announcement came after financial markets had closed for the day. But his earlier response to China had already unnerved investors, who worry that the trade war between the world's two largest economies will further drag on global growth.
